Insistent client DB transfer ends in FOS complaint against Chase de Vere

Hannah Godfrey reports

A Financial Ombudsman Service (FOS) complaint against Chase de Vere has been upheld after the firm could not transfer an insistent client’s final salary pension despite wording in the client services agreement indicating the client was paying for analysis and a transfer.

Mr S – as named by the FOS – wanted to transfer his final salary pension to his employer’s group personal pension (GPP).

He contacted Chase de Vere to advise him, and on 19 December 2017, signed a client services agreement that stated the firm would charge £3,230 for advice and implementation.

In January 2018, Mr S sent an email to the Chase de Vere adviser that said he had not yet received the cash equivalent transfer value (CETV) from the ceding scheme, but he had received confirmation from the GPP provider it could transfer into his GPP.

Chase de Vere advised Mr S not to transfer. However, the firm agreed the transfer could be arranged with Mr S being treated as an insistent client.

The GPP provider then explained they would not accept the transfer as the guaranteed minimum pension (GMP) within the scheme had not been equalised. The transfer could, therefore, not go ahead and was not completed.

GMPs affect those who were members of a defined benefit (DB) pension scheme between 1978 and 1997 when people were automatically contracted out of the State Earnings Related Pension Scheme (SERPS). A GMP is the minimum amount of income that a workplace pension must provide in retirement.

Mr S complained to Chase de Vere, which did not uphold the complaint. The firm said the £3,230 fee was for a transfer analysis, which had been provided.

‘Not 50% of the work’

The complaint was then passed to the Financial Ombudsman Service (FOS). An adjudicator looked at the complaint and felt the fee agreement was for Chase de Vere to provide advice and implement the transfer. As the transfer could not go ahead, the adjudicator thought it reasonable for 50% of the fee to be refunded.

Chase de Vere disagreed. It said there was no guarantee a transfer would take place. It said a transfer analysis was completed, and only by completing that analysis did it transpire the scheme had an unequalised GMP, which meant the provider would not accept such a transfer.

Chase de Vere said it was “totally unrealistic” to expect the information around the unequalised GMP to be known at the start of the process and to suggest 50% of the fee was refunded would mean 50% of the work was carried out, which was not the case.

A second adjudicator then reviewed the file. They wrote to Chase de Vere and Mr S with an alternative proposal. They said within correspondence the Chase de Vere adviser indicated he would charge £1,250 as part of the client services agreement for the implementation of the transfer.

As a result, the second adjudicator thought £1,250 was a reasonable proportion of the fee to be refunded, plus 8% gross interest added to that amount each year until the fee is refunded. They added the advice giant should also pay £100 for the stress and inconvenience caused.

Chase de Vere disagreed with the proposal, but the client accepted. The complaint was therefore upheld against the firm.

A spokesperson for Chase de Vere said: “We conducted a thorough analysis on behalf of the client and our fees were representative of the standard charges for our advice in this complex area, so we do not entirely agree with the FOS decision. However, we are obliged to accept it and have resolved the matter with the client accordingly.”