True Potential has been told to compensate a client after he switched pensions based on an adviser's recommendation, rather than being a non-advised transfer as the company claimed.
The Financial Ombudsman Service has upheld a complaint against the company ruling it did not treat the pensioner in a “fair or reasonable” way.
It concluded the adviser's recommendation was “not properly considered” resulting in the pensioner ending up with a more expensive pension product and less suitable investment portfolio.
What happened?
The complaint was made by a client, referred to as Mr G, who had two personal pensions which he opened on the advice of an adviser in 2018, named X in the report, who worked privately.
Three years later, this adviser moved to work with True Potential and met with Mr G twice in May and June 2021.
Mr G claimed he was told he would be better served by moving his pensions to True Potential.
A report from the ombudsman concluded there was no indication these visits, which took place at Mr G’s home, were social calls.
The ombudsman, Gary Lane, wrote: “He knew X as his adviser. And X went to the trouble of meeting with Mr G twice in quick succession.
“X explains that Mr G asks a lot of questions, so I think it’s more likely than not that Mr G would have wanted to know what X recommended he do. And I think that it’s likely that X would have responded in some way.”
The fact Mr G had previously set up pensions on the advice of X, which he had paid for “adds weight” to the ombudsman’s belief the meeting in June went further than making him aware True Potential also offered personal pensions, the report said.
Lane added: “I don’t think that Mr G was proactively looking to dispense with the pensions that he’d been recommended in 2018.In a process whereby he’d paid for advice.
“Which again adds weight to my belief that the meeting in June went further than just making Mr G aware that TPWM also offered personal pensions. And was instrumental in the decision Mr G went on to make regarding this pension switch.”
Was Mr G offered advice?
In his report, the ombudsman considered whether True Potential had provided Mr G with regulated advice to switch pensions.
True Potential told Mr G his pension had been switched on a non-advised basis, after it had sent him a direct marketing offer.
The firm explained to the ombudsman that after X had informed Mr G he was now working with True Potential, the firm sent this offer without offering advice.
However, the report said text messages between Mr G and X show the two were in touch while the pensioner was filling out his responses to the marketing offer.
The report went on to say: “Mr G says that he was persuaded to switch his pension to TPWM following his meetings with X. And, as I’ve said, I find that plausible.
