The case relates to advice given by the company to a ‘Mr S’ to transfer pension funds to a self-invested personal pension in 2016.
Mr S held two final personal pensions with Aegon, totalling £210,216, alongside a final salary pension scheme.
In early 2016, Mr S met with an adviser from Tavistock Partners Limited to discuss his retirement planning needs, and was advised to move the two Aegon plans to a Beaufort Securities Sipp (the absolute return medium risk discretionary fund manager portfolio), administered by Gaudi.
Some £204,313 was transferred to the Beaufort Sipp.
A few months later, Beaufort told Tavistock Partners Limited the portfolio manager had been changed, and the Fos said it is understood that at this point Tavistock learned that the portfolio manager had been investing in illiquid investments.
In December 2016 Mr S was advised that some of the funds within the Beaufort Sipp had become illiquid.
In January 2017, the Financial Conduct Authority then warned Mr S that there were a number of concerns with Beaufort Securities, which was placed into insolvency two years later after the US Department of Justice brought criminal charges against it for its alleged involvement in securities fraud and money laundering.
Tavistock Partners Limited then recommended Mr S switched his Sipp to Novia and invest his savings in Vanguard’s Lifestrategy 60 per cent fund.
Around £83,000 of Mr S’s money had remained with Beaufort as it was invested in illiquid assets.
In June 2021, Mr S complained to Tavistock Partners Limited that he was unhappy about the advice he was given to invest in Beaufort’s model portfolios, as his money was not invested appropriately (including the investing by Beaufort of his money into investments that were higher risk than the mandate allowed, which subsequently became illiquid and now have no value).
A month later, Tavistock Partners Limited issued its final response letter, declining Mr S’s complaint, saying that the investment decisions were taken by Beaufort, and that it (Tavistock) had undertaken due diligence on the MPS provider before deciding to invest client monies with them.
Tavistock Partners Limited acknowledged that Beaufort’s DFM did not have a long track record, but were attracted by its low cost, and said it understood that Mr S’s money would be transferred into a wide range of assets and geographies as opposed to single asset classes.
A Fos investigator concluded that Tavistock Partners Limited hadn’t treated Mr S fairly, but the company disagreed, and the case was passed to the Ombudsman.
Ombudsman Simon Fox said he failed to be persuaded that the pension switch was in Mr S’s best interests, and said his aim was to put Mr S back into the position he would probably be in now if he had not switched to the portfolios.
The ombudsman ordered Tavistock to calculate this value.