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February 27, 2023

FOS upholds latest complaint against Pi Financial Ltd

Pi Financial Ltd has been told by the Financial Ombudsman Service to compensate a former client who complained he’d been “wrongly advised” to transfer his pension.

The client – Mr M – complained about the advice he had received from Pi Financial to transfer from his three existing personal pensions into a self-invested personal pension (SIPP). And use an advisory investment management service from Mayfair Capital Limited.

Mr M said that Pi had failed to advise on the true costs associated with the new arrangement and that he had incurred unnecessary fees. He also complained that the pension recommended was more complex than his previous pension arrangements.

This complaint, which was published last week, is one of several that were upheld by the FOS against Pi Financial last year.

Background into the complaint against Pi Financial ltd

Mr M says he was cold called by a representative of an unregulated firm called UK Life and offered a review of his pension. He said he had met that person at his home on two or three occasions. He was then referred to Pi’s adviser, who he claimed he had only spoken to by telephone.

After obtaining policy information on his existing arrangements, Pi Financial issued a suitability report in November 2017 which suggested that Mr M was looking to diversify his pension and invest in ‘more exciting asset classes’. It also described his existing pensions as ‘frozen’.

The recommendation was that Mr M transfer into the SIPP in order to obtain a wider range of investment choice to ‘reduce risk’ and improve opportunity for growth.

The proposed SIPP with Intelligent Money was described as “financially strong, offering excellent service and competitively charged.”

Mayfair Capital Limited was described as a Discretionary Fund Manager (DFM). However, according to the Ombudsman’s decision, at the time Mayfair was new to the market and was actually offering an advisory service. It had yet to gain its FCA permission for ‘managing investments’.

The initial investigator upheld the complaint and concluded that Mr M shouldn’t have been advised to switch to the SIPP or invest in Mayfair. And had he been properly informed of the lower cost and guarantees of some of his existing pensions he would not have decided to switch.

The investigator took into account the possibility that Mayfair’s recommendations may also have contributed to Mr M’s losses.

But concluded that Mr M only ended up in the SIPP and was exposed to Mayfair’s advice as a result of Pi Financial Limited’s actions.

The final decision has now been published on the Ombudsman’s website.

Other Complaints against Pi Financial

There have been dozens of complaints upheld by the FOS against Pi Financial Limited. Many of which involve Appointed Representatives of the firm.

According to the FCA register, Pi Financial Ltd has a long, long list of Appointed Representatives (AR).

These include – M&S Financial, Future Wealth Management, HF Wealth Planning, MK Financial Planning Ltd and Alterno Wealth Ltd. To name just a few of them!

As the principal firm Pi Financial is responsible for any advice its Appointed Representatives  give.

FCA restrictions placed on Pi Financial

On February 17th 2023, the FCA placed restrictions and requirements on Pi Financial Limited regarding regulated activities, disposing of assets and professional Indemnity Insurance.

The Regulator said the firm “must immediately cease carrying on pension transfers and pension opt outs …for new customers.”

And that the firm “cannot provide any advice on pension transfers and pension opt outs” for existing or pipeline customers without the prior written consent of the FCA,

It also prohibited the firm from taking on any new Appointed Representatives.

 The FCA also said Pi Financial must “review its professional indemnity insurance coverage in light of the current and potential claims against it.”

And based on the Firm’s best estimate “use best endeavours to ensure that the level of coverage is sufficient to pay any potential redress liabilities arising out of the potential claims.”

Pi Financial was also told it must not take any action regarding the “disposing of, withdrawing, transferring, dealing with or diminishing the value of any assets it holds or receives, for itself or on behalf of another… until the Firm has satisfied the Authority that it has made reasonable provision for potential liabilities.”

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.