An ombudsman has upheld a complaint against network Caerus Financial Limited from a woman who argued her adviser’s negligence had lost her the opportunity to use her tax allowance.
Mrs C wished to access tax free cash from her pension before the end of the 2015/16 tax year as well as take a large additional sum - using up her tax allowance up to the higher rate tax band - for a potential property investment.
But the adviser did not complete the necessary actions in time so Mrs C could not take the money in that tax year, the Financial Ombudsman Service (Fos) heard.
One of the reasons given for the delay was that the adviser did not believe it would be approved by Caerus's compliance department.
Ombudsman David Bird upheld the complaint but did not find the adviser’s actions had caused financial loss.
Mr Bird said: "It seems to me to have been accepted that the adviser did not provide an adequate level of service to Mrs C.
"There seems to me to be significant delays in the adviser processing and administering the withdrawal of the money from Mr C’s pension.
"It may have been this that caused Mrs C to miss the end of the tax year or it may have been the adviser not having his advice checked by Caerus compliance department - [...] but either way the adviser did not take the necessary actions in good time – which caused Mrs C to miss the opportunity of obtaining the pension money in the 2015/16 tax year.
"There were two months to complete the process which should have been adequate time especially as Mr and Mrs C responded to the adviser’s queries or requests almost immediately.
"If the Caerus adviser was aware that the transfer and encashment would not be approved then he should have told Mrs C that initially so she could seek advice elsewhere.
"So I do currently believe the complaint should be upheld."
Caerus offered the woman £400 to make up for the inconvenience but said it believed the woman had not suffered financial loss as a result. In fact, Caerus said it had not been responsible for causing the loss accessing money from her pension in this way would not have been the most appropriate advice.
The woman’s husband, Mr C, had emailed the adviser on 2 February 2016 explaining he and Mrs C wanted to take both tax free cash and money from their pensions.
They did not expect to take any other income in that tax year so they could utilise their 20 per cent tax rates to take money from the pensions.
Mr C did not receive a response until he chased the adviser by email on 22 February 2016. The adviser then agreed to begin the necessary process to enable the withdrawal of the money.
But Mr C had to chase this up again in early March, which resulted in a meeting on 14 March 2016 to complete paperwork.
This was followed by completion of further paperwork towards the end of March, seemingly for processing a transfer of Mrs C’s pension from her stakeholder plan to a Sipp, the ombudsman said.
But the ombudsman did not agree the adviser’s actions had caused financial loss, saying he saw no evidence that Mrs C could not have done the same thing in the 2016/17 tax year or future tax years as she wished to do in the 2015/16 tax year.
He agreed with Caerus’ offer of a £400 award.
carmen.reichman@ft.com
