Intrinsic Financial Planning has been ordered to compensate a couple who claimed they were not aware of the new charges applied to their pension after it was transferred.
Mr and Mrs H complained to the Financial Ombudsman Service about advice given to them by Intrinsic Financial Planning.
They said they was not aware of the monetary value of the charges applied to their pensions after the transfer and complained to the Fos as they believed the transfers were not in their best interests and they were worse off as a result.
A Fos adjudicator investigated the complaint and concluded the charges for the new plan were in fact higher.
This contradicted Intrinsic’s reasoning that the transfers would give Mr and Mrs H lower fees. The adjudicator also noted there was no comparison to show the transfers were in Mr and Mrs H’s best interests.
He thought there was insufficient justification for recommending the transfers.
Roy Milne, an ombudsman at the Fos, said: "My decision is that Intrinsic Financial Planning Limited should pay the amount calculated. Intrinsic should provide details of its calculation to Mr and Mrs H in a clear, simple format."
This disagreement began in early 2016 Mr and Mrs H met with their new adviser, following the retirement of their previous one, to discuss their finances.
Mr H had three personal pensions with a value of around £68,500. A recommendation was made to transfer these into a new plan with a 5 per cent initial and 1 per cent ongoing adviser charge.
Meanwhile Mrs H had two paid up pensions with a value of around £40,000. A recommendation was made to also transfer these into a new plan, again with a 5 per cent initial and 1 per cent ongoing adviser charge.
Mr and Mrs H said they did not receive a suitability report, and it was only when they complained about the transfer, that they were given a copy of the report.
The couple said that was the first time they had been made aware of the initial charge and would not have gone ahead if they had been aware at the time of the advice.
Intrinsic did not uphold the complaints and said the couple had been made aware of the charge through a variety of documents.
Mr Milne ruled that Intrinsic must now compare the performance of Mr and Mrs H’s investment with that of the benchmark set out by Fos and pay the difference between the fair value and the actual value of the investment.
But if the actual value is greater than the fair value, then no compensation is payable. However, Intrinsic should also pay interest.
