Adviser to refund fee over insistent client Sipp transfer

Also, the transfers didn’t complete until early November 2011 so there was plenty of time for Mr N to withdraw from the process.

The adviser also said it had “no way of knowing that the property development was an unregulated collective investment scheme in 2011”.

Ombudsman’s findings

Ombudsman Philip Miller said while Fairway gave suitable advice with its recommendations to not proceed with the transfers, the suitability report lacked the impact of the “enhanced” risk questionnaire because it completely omitted any analysis of the proposed investment itself and its suitability or otherwise for Mr N.

He also raised issues with the fact that the Sipp application was made before the suitability report.

He said: “The submission of the application before the suitability report was issued might justifiably have conveyed the impression to Mr N that the report was a standard and necessary part of the process – a box which needed to be ticked, rather than information to be given serious thought before the application proceeded.”

Therefore he concluded that the suitability report by itself was not sufficient enough as a recommendation not to proceed.

However, Mr Miller argued that irrespective of any advice given by Fairway, Mr N would in any case have proceeded. 

He said: “If Fairway had declined to transact the business, it is my conclusion, based on the evidence, that Mr N and the introducer would have found another way of achieving the objective. 

“My view remains that Fairway’s actions would have made no difference to the ultimate outcome, which is that Mr N would in any case have proceeded.”

Mr Miller added: “I remain of the view that Fairway demonstrated significant failings here. As I’ve reiterated above, I don’t think that the 'enhanced' questionnaire was provided to Mr N and as outlined in the provisional decision, the fact finding with regard to his attitude to risk was incoherent and not fit for the intended purpose.”

Therefore he decided to partly uphold the complaint.

Mr Miller said it would not be fair to hold Fairway liable for the loss of Mr N’s pension funds but should pay back the £1,000 fees as the transfer should not have gone ahead.

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