The Financial Ombudsman Service has ordered pension specialist adviser Harbour Rock Capital to compensate a former client due to ‘unsuitable’ advice given during a pension transfer.
The FOS found that Harbour Rock Capital (trading as Portafina) gave unsuitable advice, did not carry out sufficient fact-finding and did not sufficiently warn Mr H or document the potential impact of accessing his pensions early.
Mr H complained to the Ombudsman (via a claims management company) about advice given in March 2023 when he was looking to access his pensions at age 55.
He was looking to access pension funds ahead of being made redundant in order to repay debt and make home improvements.
Harbour Rock Capital (trading as Portafina) recommended transferring two existing pension arrangement into a new pension and then releasing the entire pension as a lump sum payment.
Mr H complained to Portafina in April 2025, stating that it did not provide him with information in relation to his full range of options; specifically that they did not tell him that he was entitled to receive a tax-free cash lump sum from his existing pension schemes without the need to transfer his pension elsewhere. He claimed he incurred unnecessary charges and financial detriment as a result.
When Portafina did not uphold his complaint in August, Mr H referred the matter to the Ombudsman.
The Ombudsman found that that transfer was not in Mr H’s best interests and upheld the complaint.
The Ombudsman stated that there was not enough evidence to suggest that advice was necessary for Mr H, and that he should have been advised to take the funds from his existing pensions.
Harbour Rock Capital disagreed with the Ombudsman’s initial findings. It stated that regardless of whether its advice was to transfer or not, Mr H would have had to pay an advice fee for its services.
If he had not transferred, and had made the withdrawals from his pension, this fee would have been payable by Mr H from the withdrawal after the tax free cash, and therefore would have cost more. Harbour Rock stated that by recommending the transfer, Mr H made a saving of around £400 in tax.
The FOS ordered Harbour Rock Capital to return Mr H back to the position he would have been in had it not been for the advice. It ordered a return of the fees and a calculation should be carried out by obtaining the notional value of Mr H’s pensions had he remained in the exact pensions and funds he was initially invested in. It was also told to compare this with the value of Mr H’s pension with provider C at the time he accessed his funds. Any loss should be paid to Mr H.
Harbour Rock Capital argued that Mr H was intent on accessing his pension but in the judgement the Ombudsman found that there was no evidence that Portafina issued any kind of warning to the client the impact about accessing his pension early.
Joanne Molloy, Ombudsman at the Financial Ombudsman Service, said in her final judgement: “Even where a customer expresses a strong desire to take a particular course of action, the adviser must still provide a recommendation that is suitable and in the customer’s best interests.
"The adviser must also clearly explain the risks and consequences if the requested action is unsuitable. There is no evidence that Portafina provided such a clear warning or advised Mr H not to proceed in light of the identified risks.”
She also disagreed with Harbour Rock Capital that it had carried out necessary fact finding. She said that the adviser did not consider Mr H’s needs should his partner pre-decease him, with his wife being 18 years older than him.
She said: “Advisers are required to take into account all material factors that could affect a customer's future income needs. Given that a proportion of the anticipated retirement income depended on Mr H’s wife’s pensions, and considering the substantial age difference, the sustainability of income in a single-life scenario should have been fully explored and documented.”