In its latest newsletter out this week (7 November) the Fos illustrated various commonplace issues savers and investors are complaining about to show how the adviser community can get it wrong.
The complaints body has received 318 complaints about pension transfer since the pension freedoms in 2015 and about a third of these were upheld.
Among the common problems were issues around adviser delays, accusations of poor investment choices, and issues with legacy advice.
The Fos stated: "Many of the complaints we receive about pension transfers centre on delays – with people telling us they missed out on higher transfer values because a financial adviser didn’t act quickly enough. The next biggest areas of complaint are administration and the suitability of advice.
"We also hear from small numbers of people who’ve responded to cold calls from unregulated pension introducers. These complaints often fall outside our remit, meaning we don’t have the power to look into them – and can’t help people get back money they’ve lost."
One case lost by the adviser involved a woman who wanted to take her pension pot and invest it in her new start up business.
After the adviser carried out a full suitability report, working on the basis instructed by the FCA that people will be better off not transferring out of a DB scheme, they decided the transfer was not a good idea.
The adviser decided against allowing Mo to continue on an insistent client basis and refused the transaction.
The woman complained that the process had taken too long. She said she had already quit her part-time job and bought a van before being told the transfer would not take place.
After reviewing the case, the Fos found while there had been no "unreasonable delays in the process, they should have been clearer from the very first meeting about how far they’d be willing to help Mo with her pension".
The Fos told the adviser to pay compensation in its moderate band (£500 or less) in recognition of the upset caused.
In another case, also won by the Fos, a man had been given a 90-day window in which to evaluate and complete an enhanced transfer value.
But Instead of telling Saul immediately that they could not deal with his query, the adviser had to be chased for an answer.
When the man finally was able to seek help elsewhere, it was too late to carry out the proper evaluation and the enhanced transfer value was reduced by £50,000.
The ombudsman found the adviser should have told the man they were not able to help him in a timelier fashion.
The adviser was told to pay the man the difference between the two transfer values, taking both investment growth and income tax deductions into consideration.
Another adviser was haunted by advice they gave some years ago.
The case concerned a woman who had taken advice about possible transfers and consolidation of her funds.
The adviser had told her to leave most of her pensions where they were, but to transfer one which had been closed by the employer and had a significant shortfall. He had said this could lead to losses in the long term and recommended she transferred the cash value into a personal pension.
A few years later, she found out that the shortfall had been put right, and that additional payments had been made to clear the deficit.
She realised this had happened before her pension transfer took place and complained that the financial adviser hadn’t told her about this – or about the availability of the Pension Protection Fund (PPF), which could have compensated her if the scheme had become insolvent
Fos found the woman had missed out on the benefit guarantee offered by a DB scheme and the advice she had received was not appropriate.
It found the commitment to clear the shortfall, along with the prospect of recourse to the PPF, were important details that could have affected the client's decision to go ahead with the transfer. It also noted that the woman was almost 15 years away from her pension at the time of the transfer and that a lot could happen to her finances in that time.
The adviser was made to pay redress according to FCA guidance and compensation of £500 or less.
But in a case won by the adviser, the Fos decided the client had unjustly complained about advice against a pension transfer.
The woman had complained that advice she had taken several years earlier had resulted in her not transferring her pension, having been offered an enhanced transfer value.
She claimed she had been missing out on income from an annuity in the interim as she had continued to work part time.
The ombudsman said there was no case for the adviser to answer. It said the adviser had correctly taken a long-term view.
