LV must compensate for wrong Sipp information

LV must compensate for wrong Sipp information

LV has been told it must compensate a customer who was told their self-invested personal pension provider would only speak to the insurer and not them directly.

In March 2016 a customer complained about the number of units and charges being taken from his plan by LV and the business managing his Sipp.

The customer, referred to as Mr W, had been unable to get in contact with his financial adviser.

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The LV representative tried to answer as many of Mr W’s questions as possible and removed Mr W’s adviser fees on 11 March 2016 and told him it could communicate with his Sipp provider on his behalf. 

LV stated the Sipp provider was not authorised to deal with Mr W directly.

On his instructions, Mr W’s fund was then transferred back to LV on 3 May 2016 and was valued at about £98,500.

But Mr W said his pension pot could have been transferred earlier had he been told he could contact his Sipp provider directly, which would have given him a higher value.

In a final decision, ombudsman Terry Connor said: “I appreciate that LV acted in good faith throughout its exchanges with Mr W. 

“The crux of the matter, in my view, is that having told LV by 14 March 2016 that he wanted to remove his IFA from his plan, LV told Mr W that it – LV – could liaise with his Sipp provider on his behalf as the Sipp provider would not deal directly with plan holders. 

“But in fact, it transpired that the Sipp provider would liaise directly. 

“I appreciate that LV say they were unaware that when it initially told Mr W that his Sipp provider would not deal directly with him that it was unaware Mr W wanted to transfer his Sipp. But I am not persuaded this is relevant. 

“The relevant point, in my view, is that Mr W was not given accurate information in the first instance. Notwithstanding its good intentions, LV had a regulatory obligation to give Mr W accurate information."

LV only told him he was able to communicate directly with his Sipp provider in April 2016.

LV argued when it made the mistake about the contact the customer could have with the Sipp provider it was unaware his plan was to transfer the pot.

But the ombudsman ruled LV should have told Mr W he was able to contact his Sipp provider directly earlier than it did.  

To transfer his fund back to LV took 13 working days from 14 April 2016 to 3 May 2016. 

Thirteen working days from 14 March 2016, when the transfer could have been started comes to 31 March 2016. 

LV was told to find out Mr W’s fund value on 31 March 2016 and if there is a loss between this value and the amount the provider received from the Sipp provider then it should pay the difference.