Financial Ombudsman Service  

Advice delays dominate Fos pension transfer complaints

Advice delays dominate Fos pension transfer complaints

Just 2 per cent of complains about pensions to the Financial Ombudsman Service since April 2015 related to defined benefit (DB) transfers, the service has revealed.

Today (7 November) the Fos revealed it had received almost 15,000 complaints about pensions since the pension freedoms for the sector were introduced.

But despite action from the Financial Conduct Authority to increase standards among advisers carrying out DB transfers, the number of complaints about them from consumers has so far been low.

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Just 318 – or just over 2 per cent -- of the 14,912 pension complaints related to DB transfers and only a third of these were actually upheld by the Fos since 2015.

The issue garnering the largest number of complaints – 119 out of 318 – was a delay in advice. This issue was also where the Fos sided with the customer the most frequently, with a 44 per cent uphold rate.

Despite this, just five people complained they had suffered an investment loss due to a delay, with none of these reports being upheld.

Only five people complained because the adviser had declined to advise them over a DB transfer, with just one of these complaints being upheld.

Along with releasing these figures, the Fos also revealed that it considers when assessing complaints about DB transfers.

Caroline Mitchell, lead ombudsman at the Fos, said: "When we consider a complaint we’ll be asking: did the adviser really know their customer, and all their relevant circumstances? Did they understand what their customer was trying to achieve? And were there any better ways they could have helped that customer get what they want from their retirement, rather than accessing their pension funds?"

She added that advisers should keep their clients up to date and manage their expectations on timings and outcomes throughout the process, whether a transfer was going ahead or not.

Ms Mitchell added: "We’ll continue to provide reassurance – and to demonstrate – that we’ll look into pensions complaints in light of the standards that applied at the time, and that we and the FCA are on the same page when it comes to those standards."

The second largest source of complaints to the Fos involving DB transfers surrounded admin issues, with 29 per cent of these being upheld.

Keith Richards, chief executive of the Personal Finance Society, said: "It is important to acknowledge the pressure advisers are under when they give advice in this changing landscape. Frequently, consumers will already have been tempted by six-figure sums and will only be going to an adviser as a means to unlocking that fund.

"In response, the Personal Finance Society has established a Pensions Advice Taskforce. I have been hugely encouraged by the number of senior experts who have wanted to take part, including representatives from regulated firms, consumer groups and public bodies.

"Together, we are developing a code of conduct for advisers that establishes good practice beyond the minimum legal and regulatory requirements, as well as a consumer-facing guide to help consumers understand what they can expect from a PAT member and how they can find one."