The Financial Ombudsman Service has found against Rowanmoor in a sample case involving due diligence errors, which could fast-track hundreds of cases against the firm which are currently in the pipeline.
In a 63-page decision issued this month, the Fos found Rowanmoor had failed to verify the integrity of an introducer firm it worked with on hundreds of high-risk self-invested personal pension investments.
It said Rowanmoor should have spotted warning signs sooner that the regulated advice firm, CIB Life and Pensions Limited, was not giving its clients the full advice it had purported to.
Failure to do this resulted in client Mr T losing his occupational pension savings on an unregulated offshore property deal.
The Fos told Rowanmoor to drum up the cash needed to compensate the client fully, as well as take ownership of the investment so the Sipp can be closed and further fees prevented.
The investment - Cape Verde-based The Resort Group - had been sold to clients in combination with Rowanmoor Sipps by regulated advice firm CIB Life and Pensions Limited and its appointed representative RealSipp.
The Fos said Rowanmoor had received 1,387 introductions from CIB, which accounted for 26.9 per cent of all business received by the provider between 2009 and 2013. A quarter of these cases involved occupational pension transfers.
A spokesperson said the Fos was currently handling 886 complaints against Rowanmoor that involve due diligence. Of those, 548 involve The Resort Group.
It has said the case involving Mr T was a "sample case" which Rowanmoor should use in handling other complaints on this matter.
CIB is also named on more than 1,000 claims at the Financial Services Compensation Scheme, which also mention TRG.
The FSCS already awarded Mr T £50,000 in compensation in 2017, putting his losses at £90,000 at the time. He will be expected to pay this back using his Fos award.
The Fos found Rowanmoor was not responsible for giving advice to its client, but it did have a responsibility to carry out sufficient due diligence on CIB before accepting business from it.
It found Rowanmoor had known of potential issues with CIB's advice, having previously worked with the introducer on Harlequin cases.
It had carried out some limited due diligence on CIB and kept records of the type and volume of introductions it was receiving. But crucially, it had not used this information to investigate or prevent further sales.
Ombudsman Ross Hammond said: "By the time of Mr T’s application, Rowanmoor should have carried out further checks on CIB, including of its business model and asked to see suitability reports.
"Had it done so, it would have discovered CIB was not providing clients with advice. It should also have concluded that most, if not all, business introduced by CIB would produce obviously unsuitable Sipps and that there was a high risk of consumer detriment."
Rowanmoor hit back, arguing Mr T had signed forms acknowledging he had taken advice from a regulated financial adviser with regard to the transfer of his pension and had considered the impact on any protection he might have.