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Jun 04 2018

Adviser will compensate client on Harlequin investment

The Financial Ombudsman Service (FOS) has ruled that advice firm Lansdown Place Financial Management must compensate a client who complained after their pension was transferred to a Harlequin fund via a Lifetime Company SIPP.

It was ruled that Lansdown Place should not have transferred the money into an unregulated investment.

The client, Mr T, invested £30,000 of his SIPP into Harlequin after meeting with unregulated investment company, Atlantic Overseas, in 2012 who had ties to Lansdown Place.

Mr T did not meet with Lansdown Place who processed his signed application form to transfer his pension into the Lifetime Company SIPP.

A letter from Lansdown Place in December 2012 offered Mr T an investment review. They said it was not in Mr T’s best interests and accepted no responsibility for the transfer. They paid Mr T £100 in “full and final settlement in relation to the transfer”.

The Harlequin investment is now illiquid with Mr T submitting complaints to both Lansdown Place and Atlantic Overseas. His complaint was rejected by Lansdown Place as they said their involvement was limited to processing the SIPP.

The FOS decided to uphold the complaint as Harlequin was introduced by an unregulated third party.

The adjudicator said that Lansdown Place should not have processed the SIPP without considering whether the underlying investment was suitable for Mr T.

Despite Lansdown Place denying involvement in arranging the transfer to the SIPP, a letter from the firm to Mr T dated 11th December proved they had.

The ombudsman ruled that Mr T was not a sophisticated investor, making the investment unsuitable and that Lansdown Place had a responsibility to question the transfer.

The FOS ruled that Lansdown Place should pay the client £250 for the distress caused and compensation based on the method outlined in the ruling.

Read more: https://www.moneymarketing.co.uk/adviser-to-compensate-over-lifetime-sipp-harlequin-investment/

Contact United Claims if you feel you were badly advised on SIPPs.