Mr Pattison was of the view that if Carey had carried out sufficient due diligence, it ought to have known CL&P was going to be “doing more than merely introducing consumers to Carey’s Sipp”.
Mr Pattison said: “I do not consider that Carey acted with due skill, care and diligence, organised and controlled its affairs responsibly, or treated Mr T fairly or acted in his best interests by accepting Mr T’s business from CL&P.
“To my mind, Carey did not meet its regulatory obligations, and allowed Mr T to be put at significant risk of detriment as a result.”
He pointed out that he was not saying Carey should have assessed the suitability of the investment or the Sipp for Mr T as he accepted the provider had no obligation to give advice to Mr T, or otherwise ensure the suitability of a pension product or investment for him.
But the ombudsman concluded Carey should not have accepted the business from CL&P.
Mr Pattison said: “It failed to treat Mr T fairly or act with due skill, care and diligence or take reasonable care to organise and control its affairs responsibly by doing so. And, in the circumstances, it is fair and reasonable for Carey to be held responsible for its failings.”
As a result, he ordered the firm to return Mr T to the position he would now be in if it were not for “Carey’s failure to carry out adequate due diligence checks” before accepting Mr T’s Sipp application from CL&P.
It must also pay £500 for the trouble and upset caused.
Adams v Carey case
The High Court case saw claims against Carey dropped on all grounds.
Former client Russell Adams had claimed Carey Pensions mis-sold him a Sipp. He and his lawyers had accused the Sipp provider of using a Spain-based unregulated introducer to facilitate investments in Store First unit pods, which were unsuitable and subsequently deemed “worthless”.
Mr Adams had signed an execution-only contract, but his lawyers argued regulatory principles around treating customers fairly meant he should not have been allowed to open the Sipp without advice.
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