Intrinsic, a global network of financial advisors, has been ordered to pay compensation to a client who levelled a complaint with the Financial Ombudsman Service (FOS). The client claimed that she was advised to transfer two pensions with a total value of approximately £80,000 into a self-invested personal pension (SIPP) scheme, but was not adequately informed about the new scheme’s charging structures. The FOS has subsequently upheld the client’s SIPP claim, making it the third pension claim upheld against Intrinsic since February this year.
The latest client’s advisory process was marred by poor communication from an early stage. She was initially issued a suitability letter with generic details about her SIPP transfer, crucially however, the letter did not break down the costs or charges associated with the financial service. The suitability letter referenced a follow-up letter that would deal with costs and charges. However, the client never received this documentation, even after she communicated this lapse with her advisors. With no working knowledge of how much she was being charged for her SIPP transfer, the client made a formal complaint to Intrinsic, but the firm did not uphold her claim. Her SIPP claim was then referred to the FOS for adjudication.
A FOS adjudicator is a case handler with a legal background and experience in financial claims and commercial law. The adjudicator in this instance questioned the viability of the client’s suitability document for multiple reasons, including:
- The client’s previous funds were comfortably balanced and her attitude to risk was inconsistent, so her shift to a dynamic, or riskier investment portfolio should have been queried by the advisors more robustly;
- The lack of documentation relating to the SIPP’s charging structure could have influenced the client’s decision to transfer her pension.
These factors highlight a pattern among SIPP claims, where advisors are not providing full consumer disclosure about various aspects of their financial services. This SIPP claim was eventually escalated to an ombudsman, who underlined the initial adjudicator’s findings and reiterated the standard conduct for financial professionals offering services or products to the public. Namely; consumers must understand the advice that they have been given and the transfer process that will follow.
Staggering numbers of SIPP claims have been registered based on clients receiving unsuitable advice from independent financial advisors (IFAs) or firms. There has been such a degree of SIPP claims that the Financial Conduct Authority (FCA) is considering revising its rules framework for authorised financial bodies.
In the latest case against Intrinsic, the ombudsman recommended that the client be compensated in-line with where her finances would be if she had never transferred her pension – with an additional £250 payment for emotional damages.
SIPP Claims from Money and Me Claims
Money and Me Claims is an independent financial claims management company with demonstrable experience in achieving significant financial restitution for our customers. We were founded on the belief that while clients are entitled to actively engage with their finances, they should not be taken advantage of by financial advisors. Unfortunately, the number of financial claims currently registered in the UK suggests that these values and standards are not being met by such financial organisations.