Pensions  

Pension transfer specialist criticised for failing to advise

Pension transfer specialist criticised for failing to advise

Total Wealth Solutions Ltd (TWS) has been told to pay up compensation for arranging the transfer of a personal pension to a scheme which is now apparently worthless.

In 2012 a client, referred to as Mr G, replied to an advert promoting green investments that he saw in a trade publication. 

An unregulated business contacted him and referred him to TWS, which sent him a report dated 25 June 2012. 

The report, among other things, stated Mr G – who at that time was self-employed, married, in good health with two dependent children - was unhappy with his personal pension and wanted to achieve higher returns.

TWS stated it gave no investment advice adding this was a matter for the trustees of the scheme to ensure any investment choice was right for Mr G.  

The new occupational pension scheme with its higher charges needed to achieve 0.3 per cent annually to match the existing plan, assuming annual growth of 5 per cent. 

If Mr G understood and was happy to accept the additional charges, in return for a potentially higher retirement fund, then the TWS adviser stated they would be happy to recommend a transfer.  

TWS said Mr G, who was aged 50, owned his own home and wanted to retire at the age of 65, was eligible to join an occupational pension scheme.  

His pension fund of £54,810 had a transfer value of £54,160 and was invested in eight different equity funds, which were all above average risk.  

His risk profile was recorded as realistic and described as “you would like to preserve short term financial security through low risk investments, but also wish to benefit from the prospect of good long term returns from higher risk investments, which may include some lower risk share/equity based investments.”  

The trustees would invest the transfer value on Mr G’s behalf in a range of approved assets such as cash, stocks and shares, government securities and property.  

The initial set up cost was £350 plus VAT with annual ongoing fees of £250 plus VAT and TWS stated it would not provide ongoing reviews.  

TWS said: “You have confirmed that you would prefer to transfer these funds to another provider so that they can be invested into a wider range of assets and funds better suited to your risk profile. 

“Indeed you are keen to consider your own investment options.” 

Mr G gave the ombudsman a brochure of the fund into which his transfer value was to be invested. 

The fund was Global Forestry Investments where the aim was to return as much deforested land to its natural state. 

The brochure indicated that the monies would be invested in a Brazilian rainforest. 

The fund was apparently working with the local government in order to build a school and create a performing arts and sports academy. 

The name of the fund was the Para Sky Plantation Project. 

The brochure gave reasons why investing in timber was beneficial.