Phoenix Life has been accused of levying a "punitive and unfair" charge of £22,400 on a pension transfer, despite telling the adviser there were no transfer penalties in place.
The provider said it was applying a market value reduction, which equated to 22 per cent of the £101,000 policy.
The adviser's client, a 55-year-old woman, is looking to consolidate her defined contribution pensions in order to enter a full drawdown arrangement.
But the provider's move means her £101,000 former NPI pension, which was moved to Phoenix in 2012, would be reduced to £78,594.
Ray Blake, a financial planner at Berkshire-based Talking Finances, said the charge was "punitive and arbitrary" and the fact the provider looked to apply the MVR in today's market was concerning.
When he enquired about the penalty, Phoenix told him it would be writing to him in 10 days' time.
He said: "It is a scandal. They have no justification for doing this and cannot tell me how they have come to this figure. It is punitive and arbitrary and completely unfair.
"Their application of a market value reduction is a concern as MVRs, which were first applied in the industry around 2002 to 2003, were due to market conditions at the time."
MVRs are applied to unitised with profits funds and reduce the value of a policy that is surrendered early to reflect poor investment conditions.
They ensure the surrender value is not greater than the market value of the policy in order to protect the other investors in the fund.
Mr Blake said he had not come across MVRs for a while and had not seen the charge with the client's Standard Life and Aegon pensions.
A spokesman for Standard Life told FTAdviser it does not levy a market value reduction on its unitised with profits funds when a client starts to take their retirement benefits from age 55 but can ask for it under other circumstances.
A spokesman for Aegon said the provider would levy it in theory but practice showed it was currently "applying a terminal bonus across almost all investment dates".
A spokesman for Phoenix Life said: "We may apply an MVR where the current value exceeds the policyholder's fair share of the fund.
"This can happen either because market values have fallen or guaranteed values have increased and depends on a number of things such as the size of the shortfall and the volume of withdrawals from the fund.
"Guaranteed values increase when we add annual bonuses (of which 75 per cent of our policies are now receiving) but some policies have guaranteed annual bonuses of 4 per cent even if the underlying fund does not produce this return."
The fund in question is invested predominantly in fixed interest stocks (both UK government and corporate bonds) and cash (2 per cent).
Darren Cooke, chartered financial planner at Red Circle Financial Planning, said though he had not seen MVRs for a while he thought they were not unreasonable where a fund was exposed to fixed interest and property, both of which "haven't fared so well in recent times".