The Complaint That Was Never Logged
Mrs Iqbal, 79, has early-stage dementia and was widowed eight months ago. In 2019, Fairhurst Pensions Ltd advised her to transfer her £180,000 personal pension to a SIPP and to invest 60% of it in a single global equity fund. The fund has fallen 35% and she now needs £40,000 for care fees. She telephoned the firm on 3 February; the call handler's note reads 'client wants her money back, very upset'. No complaint was logged. She telephoned again on 20 March and a complaint was recorded on 22 March. On 2 April an adviser sold the fund and moved the proceeds to cash without a file note explaining why. No final response had been issued by 20 May. Her daughter has now asked for 'everything in writing' and mentions the Ombudsman.
1. Identify the complaint-handling failures and the timescales that apply.
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Failure to record. The 3 February call was a complaint in substance: she said she wanted her money back and was upset. All complaints, oral or written, must be recorded. The firm has therefore been on notice since 3 February, and the eight-week period runs from then, not from 22 March.
The eight-week rule. The firm must send a final response within eight weeks of receiving the complaint. If it cannot, it must send a written response explaining why and saying when it will reply, and must tell the client about her right to refer the matter to the Financial Ombudsman Service.
Referral rights. The final response must tell her she may refer the complaint to the Ombudsman within six months if she remains dissatisfied. The 'three business day' summary resolution route cannot be used here because the complaint was not resolved.
Other failures:
- No acknowledgement appears to have been sent after either call.
- The complaint file does not reflect her vulnerability or the involvement of her daughter.
- The adviser sold the fund while a complaint was live, crystallising the loss without any recorded rationale.
Time limits for the Ombudsman: she complained to the firm within six years of the 2019 advice and within three years of when she knew of the loss, so the complaint is in time.
2. What should the firm do now, including in relation to Mrs Iqbal's circumstances and the fund switch?
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Immediately:
- Write to Mrs Iqbal and her daughter acknowledging the complaint, apologising for the delay, setting out the eight-week position and confirming the Ombudsman referral rights. Deal with the daughter under a signed third-party authority or power of attorney, and check whether Mrs Iqbal has capacity to instruct.
- Adapt communication to her circumstances: larger print, a single named contact, no rushed calls, and extra time for decisions. She is bereaved and has a cognitive impairment, so she is a vulnerable customer and the firm must be able to show it adjusted its approach.
- Investigate the 2 April switch. The move to cash may be defensible given the £40,000 care need, but the decision, the alternatives considered and her instructions must be documented. Confirm she was not disadvantaged and that the sale did not pre-empt the complaint outcome.
- Consider whether the SIPP transfer and the 60% single-fund concentration were suitable at the time, against her attitude to risk and need for secure income.
Redress: if the advice was unsuitable, the aim is to put her back in the position she would have been in. That means comparing the value of the original pension arrangement with the current SIPP value, adding interest, and accounting for charges and the tax-free cash position.
Escalation: notify the professional indemnity insurers, check whether the matter is reportable to the FCA, and review why the first call was not logged.
3. If the complaint goes to the Financial Ombudsman Service, what will be considered and what could be awarded?
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What the Ombudsman will consider: whether the firm's advice was suitable at the time it was given, judged against the rules and guidance in force then and what the Ombudsman considers fair and reasonable in the circumstances. That includes the firm's assessment of her attitude to risk, capacity for loss and income needs, the concentration of 60% in a single global equity fund, the charges, and whether the transfer itself was appropriate for a woman then in her seventies. The Ombudsman will also look at how the complaint was handled, including the failure to record the February call, the delay beyond eight weeks, and the fund sale during the complaint.
Powers: the Ombudsman can require the firm to apologise, correct its records, and pay compensation for financial loss, distress and inconvenience. The award limit is currently £430,000 for complaints referred on or after 1 April 2024, plus interest where appropriate. The firm pays a case fee for cases that reach the Ombudsman, and the Ombudsman's decision is binding on the firm if the client accepts it.
Practical point: the firm should not wait to be referred. Where the investigation shows the advice was unsuitable, it should make an offer of redress with a clear calculation and a reasoned explanation, because a well-evidenced proactive settlement is both cheaper and more consistent with the Consumer Duty than a contested Ombudsman case.