The Financial Ombudsman Service has ruled against Towry after the consumer, referred to as Mrs A, complained that it "failed to inform her" of the change in pension legislation regarding triviality.
The firm has been instructed to pay compensation based on a formula laid out by the FOS, plus £250 "for the distress and inconvenience".

Financial Planner Online has asked Towry what the likely compensation bill will be but it said as company policy it would not disclose the sum for reasons of confidentiality.
As a result of the information given to her, Mrs A said she was unable to take the full pension fund at age 55 and was no longer able to take her pension benefits under the triviality rules.
She told the ombudsman that she would have to purchase an annuity, which was never her intention.
An adjudicator from the FOS investigated the matter and wrote to the firm saying the complaint should be upheld.
She concluded that "the wrong advice was given to Mrs A and the adviser was unaware of the change in legislation that only permitted triviality payments to be made after age 60".
All parties agreed with the adjudicator's findings, however, the pension provider stated that they required a final decision from an ombudsman to unwind the policy.
Adrian Hudson, ombudsman, said: "There is evidence the adviser gave the wrong information to Mrs A and as a result the recommendation was not suitable for her needs.
"Mrs A always wanted to be able to take the benefits from her plan as a lump sum and would not have taken effected the pension plan if she had been made aware that the benefits could not all be taken as a lump sum.
"The pension provider has confirmed that they are prepared to unwind the pension on the receipt of an ombudsman's final decision.
"I uphold the complaint against Towry Limited and I direct it to arrange for the pension policy to be unwound."

Towry released a statement, which read: "Towry has apologised to the client concerned and, in line with the direction of the Financial Ombudsman Service, has ensured they are in the financial position they would have been had the error not occurred. In addition Towry has paid the client £250 for the distress caused by the matter. This sum is in line with the usual award deemed appropriate by the FOS." 

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The exact ruling regarding compensation to the client was made as follows:

"I direct that Towry Limited should pay Mrs A compensation of (1) + (2), where:
(1) = The investment return on the contributions assuming a return equal to the average return from fixed rate bonds with 12 to 17 months maturity as published by the Bank of England from the date of each contribution to Mrs A's 55th birthday. This should be calculated gross, as I understand that Mrs A is a non-taxpayer.
(2) = Interest on (1) at 8% per annum simple from Mrs A's 55th birthday to the date of payment.
The lump sum from the pension provider will be paid directly to Mrs A. Towry Ltd should provide details of its calculations to Mrs A.
In addition, I direct that Towry Limited should pay Mrs A £250 for the distress and inconvenience caused."