Hargreaves Lansdown Asset Management Ltd has been told to compensate a client who was advised to transfer their deferred pension benefits back in 1992.
The client, who was a 29-year-old working as a quality controller for a manufacturing firm back in 1992, transferred deferred benefits from his former employer’s pension scheme to a personal pension.
Shortly after he transferred from his former employer's scheme the Bristol-based intermediary also arranged for him to transfer benefits from his current employer’s pension scheme into a personal pension.
Hargreaves Lansdown had been asked by his then current employer to provide advice to its employees, if they requested it, on their employer’s pension scheme.
Mr B dug out a letter sent to him in the year Prince Charles and Princess Diana separated by his Hargreaves Lansdown adviser in which she actively promoted her services.
In the letter, the adviser said: "As well as being responsible for providing you with advice on your pension scheme, I would point out that I cover all areas of financial planning…"
It wasn't until 2016 that Mr B complained to Hargreaves Lansdown as he said he had recently become aware that he had lost out financially as a result of transferring his deferred benefits to a personal pension.
But Hargreaves Lansdown did not uphold Mr B's complaint.
It explained due to a fire it had lost many of the records relating to Mr B’s pension transfer in 1992.
But, based on the information that was available, a spokesman for Hargreaves Lansdown said it thought Mr B had chosen to transfer his deferred pension benefits in 1992 - and it hadn’t advised him to transfer.
But Mr B argued he recalled being advised to transfer his deferred benefits and on which funds to invest in so he took his complaint to the Financial Ombudsman Service.
The ombudsman backed the client. She said taking Mr B's age and occupation into account at the time the transfer was carried out it was unlikely he would have been able to instruct the transfer without advice.
Ombudsman Suzannah Stuart noted as Hargreaves Lansdown had taken full initial and ongoing commission for the transaction it was likely advice had been given and the adviser had a duty of care to consider the suitability of the transfer.
But Hargreaves Lansdown argued given the small value of the deferred benefits Mr B had transferred "the cost involved in undertaking the advice would have been entirely disproportionate and would not have been covered by the commission payable on the scheme."
The Bristol-based intermediary accepted that it had taken both initial and trail commission on the transfer but said this was its standard practice at the time, regardless of whether advice was given.
A spokesman for Hargreaves Lansdown said they felt that in all likelihood Mr B would have wanted to amalgamate his previous pension schemes for ease of administration and simply had to instruct the transfer to the scheme.