WPS ADVISORY Ltd · DRN-6263934

The complaint Mr B complains about advice WPS ADVISORY Ltd (‘WPSA’) gave him in 2018 to not transfer his monies out of a Defined Benefit (‘DB’) Pension Scheme. Mr B says that the transfer value of his benefits in the Scheme in 2018 was around £214,000 but the transfer value has since fallen to around £160,000. What happened The trustees of Mr B’s DB Scheme wrote to him in March 2018. It was noted, amongst other things, in the letter that: “Your options at a glance • You can leave your benefits in the Scheme until you reach Normal Retirement Age and then start taking your pension. • After you reach age 55, you can ask to receive an immediate early-retirement pension from the Scheme. • At any time, you can transfer your benefits out of the Scheme and into another pension arrangement. This would give you access to more flexible options for taking your benefits from age 55. The amount you can transfer out is called your ‘transfer value’ and the terms for calculating transfer values in the Scheme are currently more generous than the law requires. … The Scheme is currently in a healthy financial position and the Trustee wants to ensure that members who transfer out also benefit from this. We have therefore set the terms for calculating transfer values at a more generous level than is required by legislation. Your pack will show how much your transfer value is enhanced by compared to the minimum required under the law. Please note that the Trustee reviews the transfer value terms from time to time to reflect market conditions. Typically, this is done every year. The terms after a future review could be more or less generous than those currently being offered. … The transfer value shown in this statement is guaranteed until 31 July 2018. … We are giving you the opportunity to take one session of paid-for, impartial financial advice… we have made advice available to you via [WPSA]. … The transfer value of your Scheme benefits at 31 March 2018 is £214,881.25. … The terms for calculating transfer values in the Scheme are more generous than the law requires. As an illustration, if your transfer value was calculated in line with the minimum required under law it would be £166,579.05. In other words your transfer value is enhanced by £48,302.30 compared to the minimum requirements.” Mr B took up the offer of advice with WPSA. Mr B had a telephone meeting with a WPSA adviser on 6 April 2018. It was noted, amongst other things, during this call that:

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• There would be no benefit in Mr B taking any action (then) currently, as he was too far away from retirement and the position was too unclear. • The DB Scheme was the best type of pension one could get and there was no investment risk associated with it. • Regarding the transfer value, the DB Scheme wasn’t offering Mr B a “sweetener”, it was just offering him more than the statutory minimum. • WPSA was recommending that Mr B do nothing at that time, if he did something he would be worse off and WPSA wanted him to be better off. • WPSA wasn’t giving advice on a defined contribution (‘DC’) plan Mr B had through his current employer with a provider that I’ll refer to as Provider Z. • The Provider Z plan was a pot of money where there were no promises of growth or income, how much it would be worth in the future was based on investment performance. • There would be no benefit in Mr B moving his monies from his DB Scheme to the Provider Z plan. • Mr B wouldn’t “earn” as much from a personal pension as he would expect to get from his DB Scheme. • The way the DB Scheme worked was that it wasn’t a pot of money, it was a promise of income. There was no investment risk with the DB Scheme, so it wasn’t invested in stocks and shares. The income that would have to be paid from the DB Scheme was increasing and with no risk. • Mr B wanted an income of £25,000 to £30,000 a year in retirement. • Mr B’s DB Scheme benefits would never be worth £25,000 a year and it was recommended that Mr B continue building his other pension provisions. • By transferring away from the DB Scheme, Mr B would be exposing the transferred pension monies to risk. • Mr B had no investment experience outside of his Provider Z plan and a fixed rate savings bond he held. • WPSA didn’t consider that Mr B would be better off by transferring at that time. If Mr B took action (then) now it would be to his detriment, Mr B should do nothing and keep his options open. • Mr B didn’t have investment experience and he couldn’t afford to expose the monies to risk unnecessarily and he would be worse off by doing so. • There was no need to take risk at this stage but Mr B should seek advice at a point when he thought he wanted to stop working. Mr B could still transfer away from his DB Scheme at a later date. WPSA set out its advice for Mr B in a letter dated 11 April 2018. It was noted, amongst other things, in this letter that: • Mr B was 51 years old and lived with his partner (who I’ll refer to for ease of reference as ‘Ms C’). Ms C was 50 years old. • Mr B had no financial dependents. • Mr B had been employed in his current position for six years and had gross annual earnings of around £49,000. In addition to this, he received interest of £700 per year. • Ms C worked part-time and her income hadn’t been disclosed. • Mr B was in good general health. Ms C had a few health issues but required no regular medication. Both Mr B and Ms C were non-smokers. • There were total outgoings of around £23,400 per year. • Mr B had around £4,000 in an ISA/current account. He also had around £62,000 in a fixed rate savings bond.

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• Mr B and Ms C’s home was in Ms C’s name. The property had an estimated value of £280,000 with an outstanding mortgage of around £29,000 and a remaining 13-year term. • Mr B had no unsecured loans, debts or outstanding liabilities. • Mr B also had a DC plan through his current employer with Provider Z. The DC plan had a fund value of around £21,838 and received contributions of £5,217 per year. • Mr B would ideally like to retire in his late 50s or early 60s, but this would depend upon his financial situation. Ms C would look to stop work at the same time as Mr B. • Once retired, Mr B would like to take a good holiday and replace his car. • In retirement, Mr B anticipated that he would require an annual income of £25,000 to £30,000. • Mr B ceased to be a member of the DB Scheme in October 2005 and, at that time, he had built up a pension of £6,345.77 a year. The pension amount increased each year. The pension that Mr B would be entitled to at age 65 was (then) estimated to be £8,479.50 a year. • Mr B couldn’t access benefits from the DB Scheme until age 55 at the earliest. • Mr B had been offered a transfer value of £214,881.35 from his DB Scheme. • Scheme benefits would increase through until normal retirement age at no cost or risk to Mr B and would escalate in payment. • Mr B didn’t have any real investment experience and there didn’t appear to be a reason to consider transferring his pension benefits from the DB Scheme into a personal arrangement. • Mr B’s existing benefits met his needs and involved little risk to him. • Mr B didn’t need to take any risk in relation to his future income from the DB Scheme. • Mr B had indicated that he wished to transfer the monies from his DB Scheme into the Provider Z DC plan, but WPSA couldn’t recommend that course of action. Mr B’s DB Scheme offered a guaranteed income, index-linked to a certain extent, that would increase before he took the benefits as well as once it was in payment. • The DB Scheme was in line with Mr B’s circumstances and retirement plans and it recommended that Mr B retain his benefits in the DB Scheme until he decided to retire. • By making no changes at that time Mr B would leave his options open for the future. And he could review things nearer to his anticipated retirement age. • A risk associated with WPSA’s recommendation was that any future transfer value may be lower (or higher), were Mr B to consider transferring in the future. • By not transferring, Mr B wouldn’t benefit from good investment returns as the transfer value within the Scheme wasn’t linked to investment returns. But this alone wasn’t a sufficient reason for WPSA to recommend a transfer. • By retaining his benefits in the DB Scheme, Mr B wouldn’t be exposed to the effect of investment losses. Mr B was sent a letter from his DB Scheme in March 2024 this recorded, amongst other things, a transfer value of £161,456. Mr B complained to WPSA in September 2025 and noted, amongst other things, that the advice he received was misleading and/or negligent because: o He was led to believe his pension would be safer, or better protected, if he didn’t transfer. o He wasn’t clearly warned of the risks of transfer values falling significantly in the future and was advised that the figures would only increase. o The risks and alternatives weren’t adequately explained to him, which meant he was unable to make an informed decision.

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o He relied on WPSA’s advice in good faith and he would have made a different decision had the advice been presented properly. WPSA responded to Mr B’s complaint in October 2025 and noted, amongst other things, that: • It was the safer option not to transfer away from the DB Scheme. • Transfer values were discussed during the call between Mr B and the adviser. • The fact that the transfer value has reduced, doesn’t mean Mr B’s DB Scheme has performed badly, because he doesn’t have a pot of invested money. He is entitled to the same benefits and the reduction in transfer value just means that the cost of providing his guaranteed benefits has gone down. As he wasn’t satisfied with WPSA’s response to his complaint, Mr B referred the complaint to this Service for review (again in October 2025). Mr B has said, amongst other things, that: • WPSA recommended that he should retain his benefits in the DB scheme. At the time the Scheme transfer value was around £214,000 and it’s since reduced to around £160,000, resulting in a loss of over £50,000 in potential transfer value. • This loss has reduced his pension options and retirement flexibility. It has also caused him stress, frustration and anxiety. • He wasn’t adequately informed of the risks associated with leaving his monies in the DB Scheme. • Had he been properly advised about the real risks of transfer values falling, he would have taken steps to transfer or seek further advice. • He believed that leaving his pension in the Scheme was the safest choice for maintaining both the value and the security of his benefits. But he now realises that key information about how transfer values can fall dramatically wasn’t made clear. • WPSA had acknowledged in its letter that it “did not receive a full breakdown” of his income and expenditure. So, WPSA didn’t obtain a full picture of his financial circumstances, which means its assessment of suitability was incomplete. • He was told the transfer value could go down, but this wasn’t presented with sufficient clarity or emphasis. • He was reassured that the Scheme benefits were safe and that the pension would grow considerably. This gave a misleading impression that the overall value was secure. • WPSA’s advice report didn’t provide a fair and balanced comparison of the advantages and disadvantages of not transferring. And without proper context on how transfer values fluctuate, he couldn’t make an informed decision. One of our investigators reviewed the complaint, they concluded the complaint was one we could consider and they said the advice WPSA gave Mr B not to transfer away from his DB Scheme was suitable. The investigator also concluded that WPSA adequately explained the risks to Mr B. Mr B wasn’t in agreement with the investigator’s assessment of the complaint and noted, amongst other things, that: • His complaint isn’t that he should have been advised to transfer as a matter of principle. His concern is narrower. Although it was mentioned that the transfer value “could go down”, he doesn’t believe “the potential scale or materiality of that risk” was clearly explained.

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• It wasn’t meaningfully explained how sensitive transfer values are to interest rate movements or that values could fall sharply or materially. • When he commented, during the recorded discussion with the adviser, that one would “hope” the transfer value would increase in future, this expectation was not firmly corrected. The emphasis of the discussion was on the safety and guaranteed nature of the income, which left him with the overall impression that remaining in the Scheme protected the overall position. • He accepts that markets have moved significantly. However, his surprise at the level of the subsequent reduction in transfer value reflects that he didn’t understand the potential for a material fall at the time. Being told that something “could” happen is not the same as understanding that it is a realistic and potentially significant risk. • His complaint is, therefore, about the clarity and balance of the explanation of transfer value volatility during a scheme-arranged transfer value exercise, rather than about general suitability principles. As agreement couldn’t be reached the complaint has been passed to me for review. What I’ve decided – and why jurisdiction The events complained about occurred more than six years before Mr B complained to WPSA. But, like our investigator, I’m also not satisfied from the evidence provided that Mr B was aware, or ought reasonably to have become aware, of the issues this complaint concerns more than three years before he first referred his complaint to WPSA or this Service. I think Mr B first became aware of the fall in the transfer value he’s complained about after he received the letter from his DB Scheme in March 2024. That was within three years of the date he first complained to WPSA. And I’ve not seen evidence that persuades me Mr B ought reasonably to have become aware of the fall in the transfer value his DB Scheme was offering more than three years before he complained to WPSA. Accordingly, I’m satisfied this complaint was referred within the time limits provided for in DISP 2.8.2R and that it’s one we can consider. As such, I’ve gone on to set out my findings on the merits of this complaint below. merits I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. When considering what’s fair and reasonable in the circumstances, I need to take account of relevant law and regulations, regulator’s rules, guidance and standards, codes of practice and, where appropriate, what I consider to have been good industry practice at the relevant time. The parties to this complaint have provided detailed submissions to support their position and I’m grateful to them for doing so. I’ve considered these submissions in their entirety. However, I trust that they won’t take the fact that my final decision focuses on what I consider to be the central issues as a discourtesy. To be clear, the purpose of this decision isn’t to comment on every individual point or question the parties have made, rather it’s to set out my findings and reasons for reaching them. Having reviewed all of the evidence, I’ve reached the same conclusion as our investigator and for broadly the same reasons.

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Where the evidence is incomplete, inconclusive, or contradictory, I reach my decision on the balance of probabilities – in other words, what I consider is more likely than not to have happened in light of the available evidence and the wider circumstances. The below is not a comprehensive list of the rules and regulations which applied at the time of the advice, but provides useful context for my assessment of WPSA’s actions here. • PRIN 6: A firm must pay due regard to the interests of its customers and treat them fairly. • PRIN 7: A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. • COBS 2.1.1R: A firm must act honestly, fairly and professionally in accordance with the best interests of its client (the client's best interests rule). • The provisions in COBS 9 which deal with the obligations when giving a personal recommendation and assessing suitability and the provisions in COBS 19 which specifically relate to a DB pension transfer advice. WPSA’s role was to consider Mr B’s circumstances and objectives, have regard to the relevant rules and regulations, and make a recommendation that was in his best interests. As part of this, WPSA also had to consider that COBS 19.1.6G makes clear the starting assumption for a transfer from a DB Scheme is that it is unsuitable. And WPSA should have only considered a transfer if it could clearly demonstrate, on contemporary evidence, that the transfer was in Mr B’s best interests. Mr B has said that he thinks WPSA failed to obtain all relevant information necessary to ensure its advice was suitable. I understand this is based on WPSA’s comment (in its response to Mr B’s complaint) that: “Whilst you provided us with an overview of your income and expenditure, we did not receive a full breakdown.” Like the investigator, I think it’s apparent from the content of WPSA’s advice letter of 11 April 2018, and also from the content of the phone call of 6 April 2018, that WPSA had requested (and Mr B had provided) sufficient information about his income and overall outgoings for the purposes of the advice process. I do accept there doesn’t appear to have been, for example, a breakdown of what Mr B’s total outgoings of around £23,400 per year were being spent on, or information about Ms C’s level of income (which was asked about). However, I do think WPSA had a sufficient understanding of Mr B’s income and expenditure, at the point of advice, for it to be able to proffer suitable advice. And I’m not satisfied more detailed information about Mr B’s income and expenditure at the time would have impacted WPSA’s advice that Mr B shouldn’t transfer away from his DB Scheme. So, I think WPSA’s advice was based on Mr B’s individual circumstances and objectives at the time and that the information it had obtained, much of which was covered in the phone call and advice letter in April 2018, was sufficiently detailed for it to arrive at a recommendation. That’s not to say, based on the evidence that’s been provided to us, I think the advice process followed was flawless. I do think the advice process could have been more complete in places. For example, I’ve not seen that the adviser ascertained the return the DB Scheme monies (if transferred) would need to have enjoyed in a personal pension arrangement to provide Mr B with equivalent benefits in retirement to those that the DB Scheme would provide. I accept it’s possible that the adviser did ascertain this, and that it then informed some of the comments the adviser made during the phone call about the fact that potential “earnings” from a personal pension would be less than Mr B could expect to

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get from a DB Scheme. But this information hasn’t been provided to us by WPSA in its file for Mr B. I can’t be sure from the evidence provided, therefore, of the exact level of growth that was needed in 2018 for a personal pension arrangement to provide equivalent benefits to those Mr B’s DB Scheme would provide. As such, I’ve considered the possibility that only a low, or modest, level of growth might have been needed from a personal pension arrangement to provide equivalent benefits to the DB Scheme in retirement, and whether this would change my view of the suitability of WPSA’s advice for Mr B not to transfer. And, on balance, it doesn’t. Overall, I still think WPSA’s recommendation that Mr B shouldn’t transfer away from his DB Scheme was a reasonable one at the time for reasons that include the following: • I think WPSA was right to point out that any transfer would subject Mr B to unnecessary investment risk. Mr B’s DB Scheme offered a guaranteed income for life with annual increases, this was a valuable guarantee. And with the DB Scheme it was the sponsoring employer of the Scheme, and not Mr B, who bore the burden of ensuring the Scheme was able to pay Mr B a guaranteed income throughout his retirement. By transferring Mr B would take on the investment risks, and if relevant annuity rate risks, for the transferred monies. • I think WPSA adviser’s assessment, during the phone call on 6 April 2018, that Mr B had very limited investment experience and couldn’t afford to expose his DB pension monies to risk unnecessarily was reasonable. The monies this complaint concerns made up the vast bulk of Mr B’s pension provisions (aside from any available State Pension). And Mr B was 51 years old at the point of advice, so there was a limited time for him to build up further provisions before his desired retirement age. So, I think Mr B had a low capacity for loss in respect of his DB Scheme monies and that these were monies that Mr B shouldn’t have been exposing to unnecessary investment risk. • Mr B was hoping to retire in his late 50s or early 60s – so, there was no immediate need to transfer and lose valuable, guaranteed, DB Scheme benefits. Further, as he was under age 55, Mr B still had time to wait before he could access any pension benefits and he could revisit the best option for him closer to his actual retirement date, when his plans for retirement were more certain. • The transfer value wasn’t guaranteed beyond 31 July 2018, but I don’t think that was a good enough reason to recommend a transfer out of the Scheme when Mr B had no real need to transfer – and where the transfer would involve the loss of guaranteed benefits and the unnecessary exposure of Mr B’s main pension provision to investment risk. By not transferring, Mr B would still have the choice of waiting and taking a guaranteed income from the DB Scheme, or else transferring and taking benefits elsewhere, when he was actually ready to retire. • Mr B did have some other assets outside of the DB Scheme, including monies in a fixed rate savings bond and the Provider Z plan (which was still receiving pension contributions). Those assets could offer Mr B some flexibility, without having to access monies from his DB Scheme, if he needed to draw upon them (after age 55 in the instance of the Provider Z plan) prior to the date on when he was actually ready to retire. As I’ve outlined earlier in this decision, the rules state that the starting assumption for a transfer from a DB Scheme is that it is unsuitable. So, WPSA should have only considered a transfer if it could clearly demonstrate at the time that the transfer was in Mr B’s best interests. I’m satisfied that WPSA’s advice was based on Mr B’s individual circumstances and needs at the time and that, having considered these, WPSA concluded it wasn’t in Mr B’s best interests to transfer away from his DB Scheme. Having regard to the information Mr B had provided WPSA at the point of advice including, amongst other things; his anticipated

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term to retirement, his limited other pension provisions (the DB Scheme was by some way the most valuable pension arrangement he held), his capacity for loss and his very limited investment experience – I think WPSA’s recommendation that Mr B shouldn’t transfer away from his DB Scheme was a reasonable one at the time. I appreciate Mr B considers that he’s lost out as his updated DB Scheme transfer value is less than the transfer value he was previously offered in 2018. But I’m not in agreement that Mr B has necessarily lost out. I say that because the advice was not to transfer, so as to retain membership of the DB Scheme and the valuable guaranteed income with annual increases that the Scheme offered, and Mr B did retain his membership of the Scheme. So, he hasn’t lost the guaranteed benefits the DB Scheme offers and, unless he subsequently decides to transfer elsewhere, those benefits remain available to help to support him in his retirement. Further, as I’ve explained above, I don’t think WPSA’s recommendation not to transfer was unsuitable – and the fact that Mr B’s DB Scheme transfer value might now be lower doesn’t mean WPSA’s advice in 2018 for him to retain his membership of the DB Scheme was unsuitable. Mr B has said that his complaint isn’t that he should have been advised to transfer as a matter of principle. He says his concern is narrower than this. Mr B has said that although it was mentioned that the transfer value “could go down”, he doesn’t believe “the potential scale or materiality of that risk” was clearly explained. And Mr B says that his complaint is about the clarity and balance of the explanation of transfer value volatility during a scheme- arranged transfer value exercise, rather than about general suitability principles. I think it was made clear to Mr B in the March 2018 letter the trustee of the DB Scheme sent him that: • The trustee “reviews the transfer value terms from time to time to reflect market conditions. Typically, this is done every year. The terms after a future review could be more or less generous than those currently being offered”. • The transfer value of £214,881.25 was guaranteed until 31 July 2018. • “The terms for calculating transfer values in the Scheme are more generous than the law requires. As an illustration, if your transfer value was calculated in line with the minimum required under law it would be £166,579.05. In other words your transfer value is enhanced by £48,302.30 compared to the minimum requirements.” [my emphasis] I think Mr B understood that the transfer value could fall in value at the point he spoke to WPSA’s adviser on 6 April 2018. I say that because the following conversation occurred during that call: WPSA Adviser: “…the transfer value they offer you reflects the income you’re giving up, the income you’re giving up is going up and up and up, ok, so you would hope all intents and purposes, that they would offer you a higher transfer value if you did it in six years, eight years, ten years’ time...” Mr B: “Yeah, but doesn’t it say in the paper though that it could go down?” WPSA Adviser: “It could do. But broadly, they’re saying to you they’re offering you what they think is fair value. If you transfer it now you’re exposing it to the markets where it’s definitely going to lose money…” The adviser also noted later in the same call that:

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“So it’s [the DB Scheme] not frozen, it’s still a very active pension in that the benefits are having to grow, but that is only the income, not necessarily the transfer value, because there’s no set way.” I think it’s more likely than not, from the contemporaneous evidence (including the call recording), that Mr B was aware at the time of the advice that the transfer value could go down in the future – which accords with what the Scheme trustee had explained to Mr B in the March 2018 correspondence. And I think WPSA’s adviser, during the phone conversation, confirmed that Mr B’s understanding that a transfer value could fall in value was correct. The adviser also explained later in the same call that it was only the income element of the DB Scheme that would have to go up and the same wasn’t necessarily true for the transfer value. I think the fact that the transfer value could fall in the future was then reinforced by what was said in WPSA’s advice letter of 11 April 2018. I say that because it was explained in that letter that a risk associated with WPSA’s recommendation not to transfer was that any future transfer value may be lower were Mr B to consider transferring in the future. So, overall, I do think WPSA made it clear to Mr B that the transfer value for his DB Scheme monies could fall in the future and WPSA gave no guarantees that this wouldn’t be the case. I appreciate Mr B considers that the extent and nature of the risk of the transfer value falling wasn’t adequately explained to him. But I’m not in agreement with him that WPSA needed to provide a more detailed explanation on the potential volatility of DB Scheme transfer values. DB transfer value calculations are complex; they take into account a number of different factors and assumptions and they are often calculated by actuaries. WPSA wasn’t in a position to explain all of the assumptions the DB Scheme would use when calculating transfer values, nor do I think it was obliged to. WPSA’s advice was not to transfer even accounting for the transfer value. And I don’t think WPSA reasonably needed to provide further explanation about transfer value risk beyond the fact that transfer values could fluctuate up or down – which I’m satisfied it did. So, I’ve noted what Mr B has said about the fact his complaint is about the clarity and balance of the explanation of transfer value volatility during a scheme-arranged transfer value exercise, rather than about general suitability principles. But, in the circumstances of this complaint, I don’t think WPSA needed to provide any more detailed information about the potential volatility of DB Scheme transfer values beyond explaining they could go up or down, which it did. My final decision For the reasons I’ve detailed above, my final decision is that I don’t uphold Mr B’s complaint about WPS ADVISORY Ltd and I make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 28 April 2026. Alex Mann Ombudsman

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