The client had mandated that Northern Foods Pension Scheme transfer his benefits to the Capita Oak scheme following a sales pitch from Capita Oak who promised a significantly higher rate of return on the benefits. The Capita Oak Scheme was subsequently failed and the client pursued Northern Foods trustees for failing to perform due diligence and adequate checks on the transfer and receiving arrangement.
It will be of some relief to IFAs that the Ombudsman ruled against the complainant, saying he made the decision and must live with it.
However the same ombudsman found the other way in a similar case.
This relates to Lloyds Bank Pension Scheme who provided an incorrect CETV quotation that stated the value of the member's benefits to be in excess of Â£30,000. As a result the client sought financial advice, and paid for it, only to find out later that the CETV was much lower.
The Ombudsman agreed that being quoted the incorrect CETV was maladministration on the part of the trustee. The compensation pay out, however, was limited to not much more than the cost of the advice.