How do I know if I was mis-sold pension?

kemmyjoe

I am seeking advice on how to find out if I was mis-sold. I was advised in 1994 to leave a Bank final salary scheme after I left their employ and transfer the value (15,000) to Clerical Medical private pension With Profits Single Contribution. The value now is about 36,000. I only realise now that back in 1994 pensions were being mis-sold and I therefore did not know I should have had a review, I think I read this was suggested back in 1997. My yearly statements from Clerical were filed away each year. Only now when I am near to NRD have I looked at the paperwork and become a reader of this particular forum that I realise I may have been mis-sold the pension. Problem is my IFA's company has changed hands about 3 times and I wrote to the current IFA company (whose books I am still on as I have been passed on 3 times) but they say they bought the book of xxx Ltd but no liabilities were transferred. The Bank does not trade anymore. I know roughly what annuity I could get with the 36,000 which is lot less than what is stated on my original Bank's Membership Certificate of £3800 pa (assuming this is the GMP). I believe for deferred members the pension in excess of GMP rises by cost of living subject to max of 5%. I do not know where the scheme ended up when the Bank ceased to be (Cert. had name on it of Sun Alliance Insurance).

I am not sure how to follow this up. The current IFA (a company) say I could contact the FSA for guidance as I may have recourse to FSCS if the company that advised me is in default. I have no letter from the original IFA setting out his recommendations, and do remember a face to face meeting in his office. I have follow up paperwork where he says he took a reduced commission. I am sure he will no longer be with us now. I do not know who to complain to, what to complain about, or if I even have a complaint.

Does anyone think I may have grounds for a complaint and what to do about it.

bigfreddiel

may be, may be not

i guess it all depends if you can prove that you weren't given allthe facts and that these weren't explained.

or on the otherhand, the people handling your pension must be able to prove that you were provided with all the facts and figures.

somehow i doubt you have a case - after all you did agree to the change - sucked in by the forecast of a much bigger pension but you weren't to know that the illustrations were totally unachievable and you definetely weren't told about the crippling fees and comission you would be charged.

good luck

fj

rabbitmumu

Hi. Sorry to hear this.

All pensions mis-selling are those who "agreed to the change" so it's not up to any individual to say whether there is or there is not a case.

The best people to speak to is the FSCS. They will be able to help you further. Especially for companies/ IFAs that have gone bust you can see who you exactly need to contact here: http://www.pensionsadvisoryservice.org.uk/dealing-with-complaints/pension-mis-selling

Given you mentioned it happened in 1994, the FSCS should be able to do something for you. As for all pensions mis-selling cases, you will need to complete a questionnaire(s) and that's the start of the process.

Don't worry about whether you have all the paperwork now, or who has transferred your liability to who, or wasting time second-guessing whether your case will be accepted or not, just contact FSCS first and see what they say.

mania112

It's the FOS not the FSCS that will handle complaints.

http://www.financial-ombudsman.org.uk/

rabbitmumu

mania112 wrote: »

It's the FOS not the FSCS that will handle complaints.

http://www.financial-ombudsman.org.uk/

For his specific case too?!

dunstonh

Pension mis-selling period was typically 1988 to 1993. There is possibly some stragglers into 1994 but by then it was pretty much known was was required and guidelines in place. In the early years of the review it was pretty easy to get cases classed as mis-sale. As time has gone on, it is harder. Even the person that set up the pension review has admitted that more people got paid out redress than they should have.

I know roughly what annuity I could get with the 36,000 which is lot less than what is stated on my original Bank's Membership Certificate of £3800 pa (assuming this is the GMP).

Is the CM policy a section 32 buy out bond or a personal pension? If S32, is there a GMP and/or guaranteed annuity rate?

I do not know where the scheme ended up when the Bank ceased to be (Cert. had name on it of Sun Alliance Insurance).

What happened to the scheme? Did it continue? Did it cease? There is the possibility of lucky escape (probably not but it has happened)

It looks like any complaint you make will have to be handled via the FSCS. Not the FOS.

jamesd

It is almost certain that the transfer has made you worse off. That's in part because of investment performance and in large part because life expectancies have increased substantially since you did the transfer - one of the risks that you take when transferring and which should be explained to those carrying out transfers. As dunstonh mentioned, some people ended up not losing all or most of a work pension by transferring and those would be big gainers, not possible losers.

This does not necessarily mean that it was a mis-sale. That would depend in part on things like whether you wanted to retire before the bank's normal retirement date, what investment value projections were in use at the time, whether you were informed of the risks and whether your risk tolerance made it credible for you to do better than with the bank final salary scheme.

These days it's necessary to calculate what the investment return needed to break even is as part of transfer calculations and even with that many IFAs would rightly be reluctant to approve a transfer because the presumption today is that it's a mis-sale unless proven otherwise.

Applying today's rules and expectations and rules to things done in 1994 doesn't necessarily result in a fair result for the vendor, though, since it's likely to result in many legitimate at the time transfers being thought of as mis-sales. This should not block you from complaining about a mis-sale, it's just an observation that the rules have changed and an IFA may have perfectly and correctly followed the rules at the time and yet today be judged to have not acted properly by today's standards. So try not to be upset at the IFA or yourself for that advice and decision. Just act on it.

If it is considered a mis-sale the result would normally be a payment of redress to put you into the position you would have been in if the transfer hadn't happened. If the IFA firm that has the liability is no longer trading and no other firm or individual has acquired the liability then the redress payment would be made by the FSCS, which handles payments for insolvent businesses. The redress payment would be likely to be in the form of an annuity for you that would replace the calculated income difference. A cash payment will not happen, do not expect one.

mania112

rabbitmumu wrote: »

For his specific case too?!

I thought FOS = Complaints and FSCS = Compensation for Institutions going belly-up.

And that's sort of confirmed here: http://www.fsa.gov.uk/pages/doing/regulated/fees/tariff/notes/index.shtml

But when you look at their websites individually, it seems either could be right/wrong.

EDIT: And if it was today and you were an IFA. If a client sees your terms of business it will (it should) direct them to the FOS if they're not happy with something.

kemmyjoe

Thank you for your responses. It is difficult to remember what was said at the face to face meeting with the IFA 18 yrs ago. However I kept every bit of paperwork from him and CM. What I do not have is the Bank’s scheme booklet, or correspondence from the trustees of the Bank’s scheme, and only recently discovered the Bank’s scheme Membership Certificate with the £3800 stated on it. The CM 1994 illustration states a 6% and 12% return: £2080 and £9460, plus a Protected Rights illustration of 0.5% and 2.5%: 223 and 546. Adding these together (6%) still does not equal the Bank’s £3800, and so I am confused why an IFA would recommend the CM personal pension over the Bank’s pension if he had compared the benefits of the Bank pension I would be giving up. I am not even sure what the £3800 means as the Certificate is dated same day as my pensionable service started. He did not write down his recommendations as I know I would have that letter on file. He did at the same time advise me on a Section 32 pension I had and did put his advice in writing on this one: 1 sentence for keeping it, and 7 sentences for transferring to personal pension. I did not take his advice on that one and left it where it was (for £3k one off contribution, now guaranteed £2.5 p.a). So glad I left that one. I would have told him I expected to retire at 60, and cannot remember any discussion on attitude to risk. I didn't have any money to risk.

I do not know what happened to the scheme, I found the name of the ‘Transferor’ on the transfer value application form, and vaguely recall this name. A company with this name on companies house is now dissolved with debts. I do not know who now has the ‘liabilities’. The IFA company is now called XXX Insurance Brokers Ltd instead of XXX Life & Pensions Ltd, and in 2001 I got a letter from my IFA on different paper, different company name saying ‘you may rest assured that our service to you will not be affected by our company change of name’. Looking at original IFA in 1994 the headed paper lists 3 Directors (X,Y,Z). The letter in 2001 lists one Director Z, and also states that X and Y no longer have any involvement with the life and pensions industry. Small print says Appointed rep of Allied Dunbar; letter 2002 from Director Z - small print says Rep only of Zurich. Letter in 2003 from Director Z says ‘I have come to an agreement to merge my business with AAAA Life & Pensions Ltd, which will ensure that you continue to receive independent financial advice’. Letter in 2007 from AAAA Life & Pensions Ltd saying they are merging with BBBB. It would seem that for a few years my IFA was not an IFA! and I am now beginning to think that the original IFA was not that independent. I have not sought any advice since 1994 with any of these companies but my name has been passed on at each takeover/merger.

Of all the companies above which one would be liable? BBBB says it’s not them. It’s a minefield to me and I am already thinking that I should leave it alone, but if you don’t ask you don’t get. Thank you all for your thoughts and time taken to respond. I will certainly look at the FSCS/FOS/PAS. I would only expect the calculated income difference if I have due cause to complain. I am not stressing about this, the government have given me 6 more years to think about their pension.

dunstonh

The FSCS handles complaints against firms that have gone belly up, closed with no assets or will go belly up because of the complaint.

EDIT: And if it was today and you were an IFA. If a client sees your terms of business it will (it should) direct them to the FOS if they're not happy with something.

Only if that IFA was trading. If they were not trading and were regulated by the FSA (or PIA prior to that) then you would go to the FSCS. If they were FIMBRA and never went on to be PIA/FSA regulated then the FSCS will not be available. Some FIMBRA firms ceased in 1994 to avoid becoming regulated as a way to shirk their liabilities.

dunstonh

Small print says Appointed rep of Allied Dunbar

This is an important point. It means they were not IFAs. It means they were sales reps for Allied Dunbar (which rebranded to Zurich). A name change is also not the same as a new company. Name changes would fall under trading names of the same company. It sounds like these are new trading entities. Allied Dunbar would not take on the liabilities of an ex IFA. Looks like a few fibs are possible here as Dunbar were not IFAs and never have been (and couldnt be due to their nature)

Of all the companies above which one would be liable?

The 1994 company. Hopefully, they were not FIMBRA. Check your headed paper for that period/firm and see what the compliance messages are regarding regulatory status. If FIMBRA, you are likely stuffed. If Personal Investment Authority then you will have access to the FSCS. FOS will not be available to you.