The Financial Ombudsman Service has rejected Sesame's argument that it shouldn't have to pay compensation for an appointed representative who didn't follow the network's rules.
In February 2012, a client referred to as Mr P was advised to transfer his pension benefits from a number of policies and pension schemes into a self-invested personal pension (Sipp).
The total pension fund was then invested in an unregulated collective investment scheme (Ucis).
Mr P complained to Sesame in July 2014 but the network argued it wasn’t responsible for the advice, as it wasn’t given by one of its appointed representatives.
Mr P then referred his complaint to the Financial Ombudsman Service.
An adjudicator thought Sesame was responsible as the advice to transfer Mr P’s pension to the Sipp was given by Moneywise Mortgage & Financial Planning Limited (Moneywise), which was an appointed representative of Sesame.
The advice was a regulated activity, and so it was a complaint the ombudsman could look at.
Sesame didn’t agree stating while it accepted it was responsible for the Sipp advice, the subsequent investment into a Ucis wasn’t permitted under the scope of permissions for the appointed representative.
This was confirmed in the Core Compliance Manual it provided.
But ombudsman Doug Mansell rejected Sesame's argument ruling the network was responsible for the advice as a whole.
The ombudsman also rejected Sesame's argument about commission stating the adviser gave Mr P advice to transfer his pensions into the Sipp when acting on behalf of the network so is responsible for compensating him.
Sesame was ordered to compare the performance of Mr P’s investment with that of the benchmark and pay the difference between the fair value and the actual value of the investment plus interest and £450 for the trouble and upset he’s suffered.