The ombudsman told Bank House Investment Management Limited to pay compensation for “the distress and inconvenience” he experienced.

The complainant, a semi-retired landscape gardener, in his mid 60s, outlined his concerns to the FOS about “the poor service” he received after his adviser moved to the firm.

Referred to as Mr F, he argued Bank House’s failure to review his finances and his pension plan during the first year after he became a client prevented him from rearranging a substantial portion of his investment before it became illiquid.

Adrian Hudson, the ombudsman, agreed with the client.

In his ruling, he stated: “When Mr F became a client of Bank House in my opinion it should have arranged a review of the investments that Mr F held shortly after it had been appointed. I consider that this was required so that the firm could have checked the suitability of the assets held and recommend changes if these were required. I consider that this should have been completed as a matter of urgency and that the results would have been available two weeks after Bank House was appointed as Mr F’s advisers.

“I think that Bank House had a duty of care to ensure that it fully reviewed Mr F’s financial situation and the funds into which his pension had been invested as soon as possible upon accepting him as a client. Had it done so it would have realised that the investment in the Centurion DMS Enhanced Fund was inappropriate and that it should have been sold.”

The client had met his adviser in 2009 when she was working for a different firm. The FOS stated that at that time Mr F was 60 and looking to retire in 6 years. Mr F was advised to invest his entire pension fund of over £45,000 in the Centurion DMS Enhanced Fund.

About nine months elapsed without a review, during which time the Centurion DMS Enhanced Fund became illiquid.

Mr F then complained about the advice he had received from his former firm, which was upheld. However, the redress was capped at the date when he became a client of Bank House, on the basis that his previous firm was no longer a party to his information and was no longer responsible for advising him from the date he informed them Bank House was now his adviser.

The FOS stated that Bank House rejected his complaint saying they were not responsible for advice he’d been given by the adviser when she worked for her former firm.

Bank House also stated that they had attempted unsuccessfully to obtain money from Centurion DMS for a different client before the fund was declared illiquid. Bank House therefore argued that this supported their view that Centurion DMS would not have released Mr F’s funds, even had his portfolio been reviewed by the adviser in the first year of his association with Bank House.

Mr Hudson said: “Had the review been carried out by Bank House I consider that it would have been aware that Mr F had invested 100% of his Sipp in the Centurion DMS Enhanced Fund and that this was inappropriate for an inexperienced investor who was planning to retire in the next few years.”

Mr Hudson looked into papers sent in by Bank House to support arguments that it could not have sold the investment in the Centurion DMS Enhanced Fund even if a review had been carried out. But he decided the investment in the fund could have been disposed of before the withdrawals were suspended in June 2011.

Mr Hudson said his aim was for Mr F to be put as close to the position he would probably now be in if he had not been given "unsuitable advice".

Bank House was ordered to pay any interest and if there is a loss, pay that amount into Mr F’s pension plan, allowing for any available tax relief and/or costs, to increase the pension plan value by the total amount of the compensation and any interest.

Bank House must pay Mr F £250 for the “distress and inconvenience he has experienced in pursuit of his complaint”.