A financial adviser has lost a Financial Ombudsman Service case over the transfer of his defined benefit pension after it was found he effectively advised himself on it and he received commission for it.
The complaint was made by a Mr M and related to a decision made in 1990 to transfer the benefits from his own DB occupational pension scheme to a personal pension.
At the time, Mr M was an adviser with a business that is now part of Zurich Assurance.
According to the Fos, records show that Mr M was a trained adviser at the time and that he personally received the commission for the transfer complained about.
Paul Featherstone, the ombudsman who made the ruling, said: "Zurich has provided evidence, which indicates that Mr M was the adviser who carried out the transfer and sale of his personal pension – he effectively sold it to himself.
"Zurich’s supporting evidence is that Mr M received commission for the sale. I think the evidence that Mr M is the adviser recorded as having received commission for the sale, is persuasive evidence that he carried things out himself.
"If he had received advice from someone else, I think it’s reasonable to assume that their name would’ve been the one recorded as having received the commission instead."
Mr M claimed he was a trainee adviser at the time and that his training had been "rushed". He also claimed he was acting as an employee rather than in his own capacity when he transferred his pension.
The complaint
Mr M complained to Zurich in 2021 about the suitability of the advice he received to transfer around £6,300 from his DB pension scheme to a new personal pension scheme.
At the time of the transfer Mr M was aged 26 and was a financial adviser with the business and was licensed to advise on personal pensions.
Mr M's recollection is that he was approached by his manager at the time about taking advice on his pension and was told transferring would be the best option for him.
He said he transferred his pension based on this and was not aware of the implications it would have on his retirement as he was only a trainee adviser at the time.
His complaint was not upheld by Zurich, which said it did not have any of the documentation from the time of the sale.
It did note that its records showed Mr M was a fully trained adviser when he sold the pension plan to himself and as such it believed he had the appropriate knowledge.
Mr M referred his complaint at first to a Fos investigator who said it shouldn't be upheld. Following this, it was passed on to the ombudsman who also decided it shouldn't be upheld.
The reasoning for this was the evidence from Zurich showed that Mr M was a trained adviser at the time.
In addition to this, it noted that the pension transfer was completed during the period of the pension review - the industry wide review which looked at pension transfers between April 1988 and June 1994 – and in 2011 Zurich confirmed to Mr M’s advisory firm that his pension did not qualify for a review because no advice was given.
