Financial Ombudsman Service  

Adviser ordered to pay after failing to respond to Fos

Adviser ordered to pay after failing to respond to Fos

An adviser has been ordered to compensate a client after he gave unsuitable advice on a pension switch and failed to cooperate fully with the Financial Ombudsman Service.

The client, who the Fos called Mr C, complained that Steven Barton, trading as Steven Barton Financial Services (SBFS), had failed to provide him with adequate advice about switching his pension and the ongoing investment performance of his pot.

In 2015, SBFS advised Mr C to move his pension savings to a new provider and invest the funds into a single absolute return fund.

Mr C has now moved to a new adviser who he said made him realise that SBFS had failed to undertake a number of important steps before giving him advice.

He said SBFS did not assess his attitude to risk in 2015 or provide him with a suitability report detailing the pros and cons of moving his pension savings. 

As a result of these omissions the pension switch and subsequent investment of his pension savings was inappropriate and Mr C said that he has lost out financially. 

The Fos said it had been difficult to collect all the relevant information from SBFS to deal with the complaint.

One of the Fos’s adjudicators said he hadn’t seen any clear reason for the switch of Mr C’s pension savings to the new provider and thought the absolute return fund recommended by SBFS had been unsuitable for Mr C’s ongoing financial situation. 

SBFS disagreed with this and said it would ask its actuaries to perform some calculations to understand better what returns other investment strategies might have provided. 

But despite requests for an update, SBFS never got back in touch with the adjudicator. 

Ombudsman Paul Reilly said when a client is advised to switch their pensions he would expect them to be provided with a detailed suitability report setting out the pros and cons but Mr C claimed he wasn’t given any documentation like this by SBFS.

He added the Fos had repeatedly asked SBFS for a copy of the report it gave to Mr C in 2015 but it had failed to provide this or give any explanation for not providing it. 

Mr Reilly said: “Of course there might be a number of reasons why SBFS hasn’t given us a copy of that information. It might be that the documentation has been lost, or destroyed, over the past years. 

“Or, as Mr C alleges, it might be that no such document was produced at the time.”

The Financial Conduct Authority in its handbook states that businesses should “cooperate fully with the Financial Ombudsman Service”.

As SBFS has failed to provide a copy of its suitability report Mr Reilly said it supports Mr C’s claims that it was never produced.

Mr Reilly concluded from the limited information he received about Mr C’s previous pension provider that there was “little benefit or necessity for him to move his pension investments to the new provider”.