Help - IFA appears to have transferred pension pots without written consent

scdandem

We're doing some exploratory worth with an IFA and have had a few discussions so far. We'd given him copies of passports, licences, bank details and NI numbers ready to go ahead once we got the pension paperwork, but on receipt it made me question the fees and with help from people on here I've done lots of research with a view to DIY instead. I've been immersed in research since our conversation last Tuesday (2nd Feb) when I said that we hadn't signed the paperwork because we had a lot of questions but would get back to him when we'd got our heads around it all. He said to take as long as necessary.

However... when I contacted Royal London today on a fact-finding mission, who we hold £200k between us in personal pensions, they needed to email back with information and when it arrived it said “The Pension to which you referred has in fact been exited, and the funds invested previously held with Royal London, transferred to your chosen new pension provider on 3 February 2021.” My husband received an email saying the same thing about his pot.

We haven't signed anything other than a very generic risk profile questionnaire. Royal London have not contacted us at all. The last time I spoke to them on email was late December on a non-related matter.

Is an IFA allowed to do this? Are Royal London allowed to release our funds without our signed authority? They make me jump through hoops every time I pay a lump sum in and I remember when we have changed IFAs over the years (retirement etc) we had to give written authority for them to even look at anything!

xylophone

Surely you need to contact the IFA and ask why he proceeded without your authority to act?

scdandem

xylophone said:

Surely you need to contact the IFA and ask why he proceeded without your authority to act?

Absolutely! But I didn't see the email until after hours, and as you can imagine we are having a little meltdown here.
I should add that the IFA is known to me, isn't a fly-by-night and I'm not at all worried about him having run off with our money! I'm just hoping to get some replies from people who maybe know the rules with regards to whether an IFA can/should be able to do this, and whether a pension company should be releasing funds without authority?

scdandem

Is there a standard procedure that IFAs and pension companies have to follow in order to move a client's money?

dunstonh

Royal London do not require discharge forms signed (barely any do nowadays).

Is an IFA allowed to do this?

No.

Are Royal London allowed to release our funds without our signed authority?

yes

They make me jump through hoops every time I pay a lump sum in and I remember when we have changed IFAs over the years (retirement etc) we had to give written authority for them to even look at anything!

Letter of authorities need signatures but most things do not any more.

Most platforms require you to sign declarations and will not start any of the process until the declarations are received.  

There are a couple of platforms that start before the forms are received.    There are two platforms, that I am aware of, that require you to get to the end of the application process and then they generate the paperwork.   If the person changes their mind at that point, the platform needs to be contacted immediately to stop it.    I have heard of cases being accidentally submitted without the adviser knowing where they use a paraplanner to carry out the preparation and the paraplanner wasn't aware that going beyond a certain point starts the process.

There is almost certainly no malice or bad intention here.   It could be inexperience.  It could be that they meant to select save and exit but pressed the button next to it instead to submit.   No adviser is going to do this on purpose as it doesn't achieve anything and just creates rework.

I suspect that when you contact the adviser to let them know, they will be surprised by it and probably highly embarrassed and appalled. 

scdandem

dunstonh said:

Royal London do not require discharge forms signed (barely any do nowadays).

Is an IFA allowed to do this?

No.

Are Royal London allowed to release our funds without our signed authority?

yes

They make me jump through hoops every time I pay a lump sum in and I remember when we have changed IFAs over the years (retirement etc) we had to give written authority for them to even look at anything!

Letter of authorities need signatures but most things do not any more.

Most platforms require you to sign declarations and will not start any of the process until the declarations are received.  

There are a couple of platforms that start before the forms are received.    There are two platforms, that I am aware of, that require you to get to the end of the application process and then they generate the paperwork.   If the person changes their mind at that point, the platform needs to be contacted immediately to stop it.    I have heard of cases being accidentally submitted without the adviser knowing where they use a paraplanner to carry out the preparation and the paraplanner wasn't aware that going beyond a certain point starts the process.

There is almost certainly no malice or bad intention here.   It could be inexperience.  It could be that they meant to select save and exit but pressed the button next to it instead to submit.   No adviser is going to do this on purpose as it doesn't achieve anything and just creates rework.

I suspect that when you contact the adviser to let them know, they will be surprised by it and probably highly embarrassed and appalled. 

Thanks for the response. So you think this is easily reversable? I'm appalled that Royal London, or anyone, could release £200k of funds without authority. My husband hasn't even met the IFA let alone signed anything!! Can this actually be right? He could be any Tom, !!!!!! or Harry. Royal London have absolutely no idea of his connection with us, he could have obtained our details fraudulently for all they know! Can this be right?

scdandem

Panic over! The IFA has just replied (late, to put our minds at rest) that there's been an admin error and the funds are on their way to OMW but fully reversible back to Royal London. We'll be speaking tomorrow. And I'll certainly be speaking to Royal London about their practices. The more I learn about what goes on in the investing world, the more my jaw drops!
Thanks for your help 

[Deleted User]

Assuming your funds were invested prior to the transfer, you may have lost some money as a result of this “admin error”.  I would ask for compensation. 

dunstonh

OMW require signatures.  So, it would be interesting to know how the transfer started.   However, OMW isn't used as much by IFAs nowadays.   They do operate their own salesforce and maybe the adviser you saw was not an IFA but FA.   Salesforces often have internal integrated software that has a different process compared to the IFA method.  So, that could potentially bypass the signatures at the application stage.

And I'll certainly be speaking to Royal London about their practices.

Royal London have done nothing wrong and nothing virtually any other provider would have done.  

 I'm appalled that Royal London, or anyone, could release £200k of funds without authority. 

When OMW send the request in, they confirm that they have had authorisation from the policyholder.   As the money is not being paid to anyone else and remains in your name, no signatures are required.    The same method is used for ISA transfers.

he could have obtained our details fraudulently for all they know! 

The declarations come from an FCA regulated company.  They cant come from someone outside of authorisation.  

Someone has messed up.  Either the adviser, a paraplanner or OMW (if it's one of their FAs).  Not RL.

Clive_Woody

That's quite an admin error. I would be very wary of someone who operates this way or can make admin errors with £200k

cfw1994

Pleased your fears are allayed for now.
Dunstonh nails it in the final line: “ Someone has messed up.  Either the adviser, a paraplanner or OMW (if it's one of their FAs).  Not RL.”
From my view, regardless of which those is, the IFA is the one responsible.   Yes, you can claim OMW or some admin paraplanner could have done this by mistake, but the IFA was the only person you spoke with and will have passed them some instructions.

 I would certainly be asking for some compensation.....& ultimately, I’d not be using that IFA.  

Curious to hear if Dunstonh knows what any claims process is for this scenario: it sounds close to unforgivable.