Adviser success as lost pension returned

Adviser success as lost pension returned

An adviser has managed to reunite a client with his pension after a withdrawn transfer request meant the £55,000 fund was lost for nearly two months.

Julian Pruggmayer, director at Financial Risk Management, criticised providers Phoenix Life and Aviva after he spent several weeks being bounced between them while trying to locate and get the funds sent back to his client.

He said: ‘For years, this client had been saving into a pension in order to provide for his family in retirement.

"Due to lockdown he was wanting to access his pension commencement lump sum so he could discharge his mortgage to avoid possible arrears. 

“The result is that for almost [seven] weeks he has been waiting for his money, not even knowing where it is.”

After FTAdviser became involved, Phoenix returned the funds on November 6 and they arrived with Aviva on November 10.

The client was a member of a group personal plan with Aviva via his employer and also had a personal pension with Phoenix Life worth £55,000.

In August, the client went to Aviva to see whether he could move his Phoenix pension to his group plan to take money out to pay off his mortgage.

Aviva suggested the client should speak with an adviser so he fully understood the implications of doing this but the Aviva operative still went ahead and issued a transfer request to Phoenix.

An Aviva spokesperson said it normally tells clients several times during a transfer process to seek advice.

It said: “We can confirm that financial advice was signposted to [the client] on three occasions throughout this process and included details about the consequences of proceeding to transfer his personal pension without advice.”

After the transfer started, the client sought advice from Mr Pruggmayer, who immediately saw that withdrawing from the Aviva pot may have had negative repercussions for the client.

Therefore, he informed Aviva and Phoenix that the client had changed his mind about the transfer.

Aviva had already received the £55,000 from Phoenix but when it received the calling-off notice from the adviser, it sent the funds back.

Aviva told FTAdviser: “Once we receive a fully completed transfer form, whether it’s a transfer into or from Aviva, we aim to process the transfer as quickly as possible. 

“The speed of transfers between providers is a key focus for regulators, and there are initiatives in place to speed up transfers and provide transparency about how quickly providers process transfers in and out of pension schemes.”

After assessing the situation in September, Mr Pruggmayer recommended a partial transfer from the group pension to Prudential, and sent off the documentation.

However, Mr Pruggmayer received an email from Phoenix stating it would not accept the money back into the pension, so he wrote to Aviva - but Aviva did not have the client's money either. 

During a series of correspondences over October, Phoenix argued that it had sent the funds back, but when Aviva asked which account and when the money was returned, Phoenix replied that it would take five to 10 days to provide that information to Aviva.