The Financial Ombudsman Service has ordered TenetConnect to compensate a non-advised client, ruling the firm failed in its duty of care.
According to the decision, the network made a mistake in helping the client to open a self-invested personal pension account to invest in an unregulated scheme, without giving him advice.
The unregulated scheme invested in a golf course in Spain.
The client transferred their pension savings into what they believed to be property investments through a Spanish firm called Resina Golf, later finding out they owned land next to the golf course.
TenetConnect claimed the transfer of client’s funds was on an execution-only basis and that any advice was given to the client by an unregulated introducer.
However, ombudsman Terry Connor did not agree that TenetConnect should not be held responsible for the actions of an introducer, since he was not an authorised representative of the firm.
“TenetConnect were aware that Mr F was entering into a pension transfer and opening a Sipp,” he said, adding: “They were aware that this was only to facilitate the golf course investment”.
The Fos stated TenetConnect knew cash transferred into the Sipp would then be invested into a Ucis.
This was therefore a connected transaction for regulatory purposes and should have been treated as such.
“It follows that as I have concluded the transactions were not execution only, that the transactions are connected at that TenetConnect should have exercised a greater duty of care to Mr F, I am not persuaded to depart from the conclusions in my provisional decision.”
The complaint was therefore upheld, with TenetConnect ordered to pay compensation, along with £250 for the “concern and worry” Mr F endured in discovering his pension fund was invested unsuitably.
ruth.gillbe@ft.com
