The ombudsman said had reassurances instead been given about the protections which would still be available, even in the worst case scenario of entering the PPF, then Mr D would have likely viewed things differently.
It also pointed out that Mr D didn’t need to make a decision about whether to transfer until more details were known about the options available to the steelworkers.
Miller said: “My understanding is that there was no imminent prospect of the BSPS entering the PPF, and even once the options were known, members still had the choice of transferring out of the scheme, rather than being forced into the PPF.
“So I don’t think that these concerns, if appropriately managed, would have been sufficient justification to transfer at this time.”
The Fos also found that recommending a transfer to allow flexible income withdrawal was not a good enough justification when a steady, guaranteed income from the BSPS would have met Mr D’s income requirements and offered him this peace of mind for the rest of his life.
To achieve an annual investment return of over 14 per cent to simply match the BSPS, Mr D would have needed to take investment risks significantly higher than he was either prepared, or in a position, to take.
Miller said: “The justification for nevertheless transferring, despite the very high likelihood that the scheme benefits couldn’t be matched (and almost certainly not with the type of investment risk appropriate for Mr D) was that it was nevertheless suitable in view of Mr D’s stated objectives and the concerns about the BSPS.
“And whilst I accept that the critical yield isn’t the only factor to consider when weighing the suitability of a transfer, I’m unconvinced by what Argent Wealth, or its representative, considers to have been the overriding justifications for proceeding with the transfer.”
Miller came to the conclusion that the recommendation to transfer wasn’t suitable for Mr D, nor was it in his best interests.
Therefore, he ruled Argent Wealth should put the client into the position he would be in were it not for the unsuitable advice, up to a maximum of £160,000. However, should the compensation amount exceed £160,000, he recommended the firm should pay the difference also.
The reason is that the Fos has an award limit of £160,000 for claims against advice given before April 2019, after which it went up to £350,000.
BSPS members were asked to decide by December 2017 whether to move their DB pension to a new plan, BSPS2, or stay in the existing fund, which was then moved to the PPF as part of a restructuring of pension liabilities.