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The complainant, referred to as ‘Mr H’ by the Financial Ombudsman Service (FOS), was advised to transfer his occupational pensions to a self-invested personal pension (SIPP) some 18 years ago.

Mr H had been assigned an executive pension plan (EPP) in 1996 and, later in 2000, a recommendation letter was issued by Mr H’s adviser that suggested he make the transfer.

A report from 2000 highlighted that Mr H had no intention to “draw on his pension yet because, being a final salary scheme, the earlier retirement reductions would be too penal”.

The note also outlined that Mrs H was not employed at the time of the transfer, although she had five investment properties worth approximately £525,000.

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A fact-find completed in January 2001 indicated the client’s attitude to risk was 3 or 4 on a scale of 1 to 10, while limited  information was recorded about other assets.

Following the first complaint, an offer of £50,450 was made, which would be a return of the transfer penalty, plus a payment for distress and inconvenience. It was meant to put Mr H in the position he would have been in if the transfer had not taken place.

Mr H accepted this offer, but it was agreed that this was only for the application of the transfer penalty. It was further agreed he could continue with his complaint about the suitability of the advice.

Mr H then referred his complaint to the ombudsman where it was reviewed again. The FOS found it was “not convinced Mr H would have proceeded with the transfer had he appreciated the size of the penalty”.

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The ombudsman concluded he was “not satisfied” the advice to transfer from the EPP was suitable due to there being “no need to transfer in 2000 as no income was taken until 2003”.

Tilney, which is now dealing with the complaint, disputed the treatment of compensation already paid by Ashcourt Rowan. 

The FOS replied: “The settlement of the first complaint was designed to put Mr H in the position he would have been in if the transfer had not taken place. The proposed redress for this complaint starts from the position that the transfer had not taken place and that any market value adjustement charged on the transfer of the fund would have been known and accepted.”

As a result, the ombudsman has required Ashcourt Rowan Financial Planning to pay compensation of up to £150,000, plus any interest.