Defined Benefit  

Adviser bags client £74k for missold DB transfer

Adviser bags client £74k for missold DB transfer

An advice firm has won £74,000 in compensation for its client after it discovered he had been inaccurately advised to transfer out of his defined benefit pension in a case dating back to the 1990s.

Neil Liversidge, managing director of West Riding Personal Financial Solutions, first noticed his client may be entitled to compensation when he was giving advice on the client’s workplace pension and discovered he also held a pension with Royal London, which dated back to 1992.

This had started as a personal pension plan with financial planning firm Acuma, formerly Devonshire Life.

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Acuma was later sold in 1993 to the United Friendly group which merged with Refuge Assurance in 1997 to form United Assurance Group. In January, 2000 Royal London bought UAG.

The personal pension plan came about after a salesperson from Acuma had advised the client, who wants to remain anonymous, to transfer out of a DB scheme which he held with his previous employer Gestetner, a reprographics company.

Mr Liversidge said this raised alarm bells as many DB transfers carried out in the early 1990s were invalid, so he submitted a complaint on his client’s behalf directly to Royal London to seek redress.

Mr Liversidge said: “From my experience of the period, I knew very few DB transfers done in the early 1990s were valid. I had blocked dozens of transfers out of the NHS, teachers, mineworkers and other such schemes. 

“As soon as I knew his Royal London pension had come about as a result of a transfer out of Gestetner’s occupational scheme, I figured we should file a complaint.  

“Acuma’s funds have been poor performers, and I knew there was no way he could have been better off due to the transfer.”

The complaint was successful and Royal London agreed to pay £74,167 into the client’s pension plan, as well as £500 for the trouble and upset caused.

A Royal London spokesperson said: “The client was advised in 1992 to transfer out of his final salary pension by Acuma. After reviewing the sale, we did not believe the advice to transfer was suitable and we carried out a loss assessment based on the guidelines of the regulator. 

"We have looked to put the customer back in the position he would have been had he not transferred the plan, and we understand the offer we have made has been accepted.”

WRPFS can pursue claims on behalf of its clients as it holds claims management permissions, something which Mr Liversidge has encouraged all adviser firms to consider.

In April, the FCA became the regulator of CMCs and its rules state that if a firm carries out regulated activity they will need to get permission, unless they are exempt.

These activities include seeking, referring, advising and representing clients with their claims, including claims made to the FSCS.

Mr Liversidge said: “We decided to obtain the FCA’s claims management permission precisely so that we could help genuinely-wronged clients obtain fair compensation and keep the vast bulk of it.