Expert Opinion

More and more people are willing to complain either through the courts or via the Ombudsman.

The need to be able to have a clear understanding of the law and how the law is applied is a critical part of defending suitable advice.

Equally, having a good understanding of all things Pensions and the application of the FCA rules (at the time the advice was given) is a critical part in defending good advice (defined as advice that a reasonably competent person would have given).

There have been significant changes in Pensions Legislation in the last 20 years (as you all know) – and much of that knowledge of the pre and post Aday changes (2006) as now retired from the profession (but, not us).

We have the necessary technical insight and information to defend the advice or action of the Firm/adviser. We look at the case through the eyes of qualified advisers having had a combined 70 years experience in pensions. We understand the standards that should be expected of a reasonably competent person in delivering advice to a consumer.

We can explain and apply the legislation to the particular circumstances of the case.

In these cases, we bridge the gap between the COBS rules on advice suitability and the legal beagles.

We help develop the case by clarifying the pension and advice position, supporting the lawyers in mediation meetings or defending against the claimant’s lawyers.

Evidence

A client complained in respect of an IFA who had omitted to advise them to obtain protection dating back to 2006 in respect of Primary and Enhanced Protection. The claim was substantial and the client employed a well qualified Independent Financial adviser together with an actuary to show the calculations for the losses being claimed.

The Actuary, in conjunction with the adviser, put forward an argument to demonstrate that the client would have benefited from the Protection, had he been advised to apply. It seemed a very strong claim on the surface.

Critical Analysis

We approach these scenarios within a set framework . We start with the data, then the analysis and finally the evaluation. The key here is that we have previously dealt with clients who have Primary and Enhanced protection. And are fully aware of the requirements

Application of the regulations – the data showed that the client was unable to apply for Primary Protection as the value of his benefits did not exceed £1,000,000 as at 6/04/2006, which was the requirement.

The claimant’s adviser argued that the client would have made a contribution to increase the value of his fund up to this figure had he been told. This gave us another opportunity to demonstrate the legislation in force at the time.

Prior to 06/04/2006 there was a limit on the amount of contribution that an individual could pay, the issue in this case was that the client had insufficient earnings to be able to justify the contribution , again we were able to highlight their lack of knowledge.

The ability to apply for Enhanced Protection was available up to 05/04/2009 , the client had some Defined Benefit pensions ,these were deferred. It would have been possible to have claimed Enhanced Protection, in this case.

Enhanced Protection is the premier protection , in that, there is no upper limit on the value protected in money purchase benefits , however, in respect of Defined benefits there is a maximum amount of increase in the value from 5/04/2006 to date of vesting or transferring
benefits

The issue with Enhanced Protection is, at the date of taking/transferring benefits the increase in the value of the deferred benefits are compared to the rise in inflation or 5% since 05/04/2006.The claimant’s team had overlooked this and merely focused on the entry into Enhanced Protection.

We approached the problem by analysing if the client would have benefited from Enhanced Protection, we were able to demonstrate that the client would have had the Protection rescinded at the date of taking benefits and would have incurred a significant tax charge.

Evaluation

We were able to produce a comprehensive detailed report for the Lawyer which refuted each of the claims made against the IFA/Firm. In the report we were also able to demonstrate that the counterfactual position would not have benefited the client.

We proved that the actual position of the client was more beneficial.
The case proceeded to mediation where our client (pension lawyer) was able to refute all claims and stoutly defend his client.

The key is that we collaborate with you and provide detailed expert opinion in terms of the Pension Tax Legislation , due to our experience and focus on pensions we can contribute significantly to enhancing your ability to build a strong defence for your client

You are experts in the law. We are experts in Pensions.
Together we can build a powerful case for the defence of suitable advice.

How we can help

Peter and John have extensive experience of helping firms and advisers with their retirement income advice proposition and adviser training. If you would like to discuss how we could help refresh and support your adviser training or provide input into your retirement income advice proposition, please do get in touch – we are always available for a virtual coffee.