Financial advisors, Portafina*, has become the newest firm to land in rough waters. The Financial Ombudsman Service (FOS) has received 128 complaints. 84 of those are upheld and 41 are still pending investigation.
There are failings on behalf of clients. last, the FOS upheld a complaint made by a client known only as Mrs. G. The client had been advised to transfer into a self-invested personal pension (Sipp) from her occupational pension scheme. The adviser placed her savings into renewable energy and overseas properties.
The advice given to her in 2011 has now rendered Mrs. G unable to withdraw benefits from her pension. this is often thanks to her funds being illiquid. As a result, she cannot easily sell or exchange them without incurring substantial losses.
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Before she moved her money, Mrs. G’s pension was valued at a touch of over £253,000. Mrs. G had hoped that she would be ready to pay off debts and make home improvements before her planned retirement.
Portafina has been ordered by the Ombudsman to pay a minimum of £150,000 in compensation to Mrs. G. this is often the utmost amount of compensation that the FOS can order. it’ll return her to the financial position she would are in if she had not followed the recommendation.
Ombudsman for the FOS, David Ashley, stated:
“Recommending that Mrs. G cop-out then transfers out of her occupational pension scheme was clearly unsuitable advice.
“The adviser should have told Mrs. G to stay a member of the scheme. This was Mrs. G’s only pension provision. it had been also a big amount of service that she had built up.
“Mrs. G would likely have relied thereon on to supply an income through her retirement. Mrs. G hadn’t got the capacity to simply accept the many risks that the transaction presented. Effectively opting out of her occupational pension scheme and transferring the accrued benefits than investing in funds that presented appreciable risks.
Glyn Taylor, solicitor at APJ said: “If Mrs. G has been advised correctly, it’s likely she would have stayed in her previous pension. Moving to a Sipp is usually risky, and on the entire not suitable for novice investors.
“Many people have received similar poor advice from financial advisers and introducers who cold-called them offering a free pension review. they’ll even be due compensation for his or her losses.”
Have you moved your pension after advice from Portafina or another firm? Contact our legal experts today for a free consultation on whether you’ll secure compensation.