Hansells Solicitors · DRN-6261489

The complaint Mr M complains that, following a review which identified that advice Hansells Solicitors (‘Hansells’) gave him to transfer away from a defined benefit (‘DB’) pension scheme was unsuitable, Hansells hasn’t addressed the underlying reasons it was concluded the advice was unsuitable. Including that an inadequate pension transfer analysis was undertaken, there was an inadequate assessment of the sustainability of his pension fund through retirement and there was inadequate gathering of his personal information, needs and objectives. Mr M says that he’s been left in a position where he’s unsure whether he’ll have enough money to support him through his retirement. What happened Mr M was a member of a DB Scheme and he was advised by Hansells to transfer the monies away from that Scheme into a personal pension arrangement in 2017. The Financial Conduct Authority (‘FCA’) subsequently reviewed a sample of Hansells’ DB pension transfer advice. As a consequence of the FCA’s findings from that review, an independent consultant, Firm B, was appointed by Hansells at the request of the FCA (pursuant to section 166 of the Financial Services and Markets Act 2000) to carry out a review of the DB transfer advice provided by Hansells during the period from 1 April 2015 to 4 May 2018 (the ‘Review’). Hansells wrote to Mr M in June 2022 to ask if he would like to be included in the Review and Mr M confirmed he would. In October 2023, Hansells informed Mr M that Firm B had completed its review and concluded that the advice Mr M had received from Hansells to transfer away from his DB Scheme was unsuitable. As such, Hansells asked Mr M if he would like a loss calculation performed to see if any loss had been suffered as a result of its unsuitable advice and Mr M confirmed that he would. Loss calculations were then completed by an actuary (Actuary C) who was appointed by Firm B. I can see that Actuary C completed its initial calculation on Mr M’s case on 12 August 2024. In its calculation Actuary C confirms that “The loss assessment has been conducted in accordance with the relevant rules and guidance in FCA Handbook DISP App 4”. Actuary C’s calculation showed that Mr M hadn’t suffered a loss – the calculation recorded that he would be a little under £42,000 better off as a result of having transferred. The calculation did apply an early retirement factor of 97.3% as at age 59 (the Normal Scheme Retirement age was 60), on the basis that Mr M had accessed some of his pension monies at age 59. Hansells wrote to Mr M on 15 August 2024 detailing the outcome of the loss assessment and Mr M responded to Hansells on 28 August 2024. Amongst other things, Mr M noted that: • He had had an interview with Firm B (as part of the Review). He had explained to Firm B that his decision to transfer his DB Scheme was on the basis that a

-- 1 of 5 --

sustainability calculation estimated the transferred funds would last long enough to meet his estimated income requirements. • Following the loss assessment, he doesn’t know how long his transferred pension could reasonably last and he should have been provided with an updated sustainability calculation to enable him to understand this. • An actuarial reduction of 2.7% per year was applied in the loss calculation because he accessed some tax-free cash before age 60. However, the monies transferred from his DB Scheme weren’t his only pension monies, and if he hadn’t transferred then he would have accessed the monies from a different pension arrangement rather than taking them early from his DB Scheme. As such, there should be a revised calculation with no actuarial reduction. • There should be a redress payment for the mistakes made and time delay, including the original mistake in advising a transfer based on an incorrect sustainability assessment. Following this, Actuary C performed a second loss assessment calculation on 18 September 2024. Again, in its updated calculation Actuary C confirms that “The loss assessment has been conducted in accordance with the relevant rules and guidance in FCA Handbook DISP App 4”. In the updated calculation Actuary C didn’t apply an early retirement factor of 97.3% and it calculated the benefits at the Normal Scheme Retirement age of 60, so it amended the 2.7% reduction issue Mr M had noted. The updated calculation still showed Mr M hadn’t suffered a loss – the calculation recorded that he would be around £41,000 better off as a result of having transferred. Details of the outcome of the updated calculation were sent to Mr M on 25 September 2024. And, on 2 October 2024, Mr M asked Hansells to reply to the other points he had made in his earlier 28 August 2024 email. Hansells subsequently wrote to Mr M on 23 October 2024 and stated, amongst other things that: • Firm B was appointed to carry out a review of the DB transfer advice provided by Hansells during the period 1 April 2015 to 4 May 2018. The Review has been, and is continuing to be, carried out by Firm B at arms-length from Hansells, and with oversight of the FCA. • Firm B carried out a detailed review of each individual’s client file and there has had to be continued liaison between Firm B and the FCA. • The loss calculations were undertaken by Actuary C. • Hansells has only communicated the findings of Firm B and Actuary C to Mr M. This has been by way of letters being drafted by Firm B/Actuary C which are then issued by Hansells, with the approval of the FCA. • Hansells has been required by the FCA to undertake the process which has been followed and Hansells has had limited, if any, influence on the timeline for the various stages of the Review. • In relation to the timeline for the calculation, this has been largely dependent on the time it took Mr M’s pension providers to provide the necessary data which was required to undertake the calculation. • In order for Actuary C to be able to carry out the loss calculation, Actuary C required information to be provided by the pension provider that Mr M’s DB monies were transferred to. Actuary C/Firm B experienced a number of difficulties in obtaining information from that pension provider. And that pension provider didn’t provide the information requested until the second quarter of 2024. • Loss calculations, in accordance with the FCA’s guidance, are calculated on a quarterly basis. As such, following receipt of the information from the pension

-- 2 of 5 --

provider in question, Actuary C was then able to calculate whether Mr M had suffered a loss with reference to 1 July 2024 valuation dates. And Actuary C then issued the outcome of the calculation prior to the end of the second quarter. Actuary C wasn’t able to complete the loss calculation during the first quarter of 2024 as the pension provider in question hadn’t provided the required information by then. This was outside of Hansells’ control. • Firm B is unable to provide the sustainability calculation Mr M has requested. Mr M then referred his complaint to us for review in March 2025 and he has noted, amongst other things, that: • He was contacted on 12 October 2023 and advised that, following a review in 2019 initiated by the FCA, Firm B had concluded the advice he received to transfer his DB pension monies in 2017 was unsuitable, with the following concerns identified: o Inadequate pension transfer analysis was undertaken. o Inadequate assessment of the sustainability of the pension fund through retirement was undertaken. o Inadequate gathering of personal information, needs and objectives in order to provide suitable advice was undertaken. (And Mr M says Hansells hasn’t addressed these points). • Actuary C has calculated he has suffered no financial loss. • He fully accepts that he has suffered no financial loss which gives him some reassurance. • He made a decision to transfer his DB monies, and subsequently to retire early, on the basis of an incorrect sustainability assessment. • Having retired at age 55, he doesn’t know whether he has enough money to see him through his retirement. • Due to his ongoing concern about whether he has enough money for his retirement, he has started working again. • It took from June 2022 until August 2024 for the investigation about his pension transfer to be completed. • He hasn’t suffered financially as of yet, but he has struggled mentally to make decisions about spending money. • He has suffered distress and inconvenience. One of our investigators reviewed the complaint. The investigator said the Review that was undertaken into Hansells’ business was instructed, and overseen, by the regulator. The investigator noted that an independent actuary had conducted a loss assessment, using approved FCA methodology, and had found that Hansells’ advice failings hadn’t resulted in Mr M suffering a financial loss. The investigator explained that the purpose of the loss assessment process was to identify if there was a loss, and if there was, to put the consumer back in the position they would have been in but for the unsuitable advice. The investigator acknowledged that having to go through a loss assessment process could be a worrying experience. But the loss assessment had shown the transfer hadn’t resulted in any financial detriment to Mr M, and the investigator didn’t consider it would be fair to say that, despite this, Hansells should still pay some other form of compensation to Mr M. So, they didn’t think a distress and inconvenience payment should be made in this complaint and they also didn’t think Hansells needed to provide Mr M with a new sustainability analysis of his pension provisions going forward. Mr M noted, amongst other things, in his response to the investigator’s assessment that:

-- 3 of 5 --

• While he has some reassurance that he’s not financially worse off from transferring his DB scheme, he will now have to pay for an adviser to correctly calculate his pensions’ sustainability. • He thinks Hansells should offer a refund, or part refund, of the £3,000 fee it received for giving unsuitable advice. As agreement couldn’t be reached the complaint has been passed to me for review. What I’ve decided – and why 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. 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. I appreciate Mr M has highlighted that Hansells hasn’t provided any substantive comment about the inadequacy of its 2017 pension transfer analysis, or the inadequacy of its 2017 assessment of the sustainability of his pension fund through retirement, or the inadequacy of its gathering of his personal information, needs and objectives in 2017. However, it’s already been concluded by way of an FCA-directed section 166 skilled person review that the advice Hansells gave to Mr M was inappropriate – and, in my view, that is sufficient. So, following Firm B’s assessment, I’m satisfied that under the circumstances Hansells doesn’t also need to now provide Mr M with any commentary/analysis of the adequacy of its actions when advising on the DB transfer. Firm B arranged for Actuary C to perform loss calculations and Actuary C confirmed that both loss calculations it performed in Mr M’s case were “conducted in accordance with the relevant rules and guidance in FCA Handbook DISP App 4”. This is in line with the approach this Service typically directs a firm to take where we uphold a complaint for unsuitable DB transfer advice – by which I mean this Service also tells firms to undertake a redress calculation in line with the rules for calculating redress for non-compliant pension transfer advice, as set out in the regulator’s handbook in DISP APP 4. I’m satisfied that Actuary C, as part of the FCA-directed review into Hansells’ past business, has already performed the relevant loss calculations, in accordance with DISP APP 4, in Mr M’s case. And Actuary C acted appropriately by performing the second loss calculation (again in accordance with DISP APP 4), based on Mr M’s former DB Scheme’s Normal Retirement Age, after Mr M highlighted in the counterfactual position he would have accessed monies from other sources in 2023.

-- 4 of 5 --

Mr M has said that, while he takes some reassurance from the calculations, he should also be provided with an updated sustainability calculation based on his current provisions. But this isn’t something a respondent firm needs to provide as part of performing a loss calculation in accordance with DISP APP 4. And it’s also not something I’m separately directing Hansells to do here. I appreciate Mr M had to wait quite a long time between first being invited to take part in the Review and later being provided with the outcome of Actuary C’s loss calculations. I also appreciate Hansells’ submission that the FCA required Hansells to undertake the process which has been followed and Hansells had limited, if any, influence on the timeline for the various stages of the Review (both for Mr M and for others). As Mr M is aware, the loss calculation suggests that, based on the DISP APP 4 methodology, he will be around £41,000 better off as a result of transferring his pension. So, while Mr M did have to wait some time for the Review process to be completed, I do think the outcome of the calculation ought reasonably to have gone a significant way to alleviating the concerns Mr M had while the review was ongoing, and the impact these had on him. I’ve noted what Mr M has said about the £3,000 fee Hansells received for its 2017 advice. I can see that Hansells’ £3,000 fee was deducted from Mr M’s new pension plan on 2 May 2017 (the same date monies were transferred into that new plan from the DB Scheme). As the fee was paid from Mr M’s new pension plan in 2017, then the value of Mr M’s actual current pension provision, that was used for comparative purposes in Actuary C’s loss calculation and at the valuation date used in that calculation, was lower than it would have been if Mr M hadn’t paid the £3,000 fee in 2017. So, the £3,000 fee is already allowed for (indirectly) in the DISP APP 4 overall loss calculation Actuary C performed. And this showed Mr M hasn’t suffered a loss compared to the position he would have been in if he had stayed in the DB Scheme (and not paid the £3,000 fee). As such, while I appreciate it will come as a disappointment to Mr M, I’m not in agreement that Hansells needs to refund the £3,000 fee it received in 2017. So, overall, I think Hansells has already done what it needed to do in respect of the issues this complaint concerns and I don’t think it’s fair and reasonable in all of the circumstances of this complaint to make any financial award. My final decision For the reasons I’ve explained above, my final decision is that I don’t uphold Mr M’s complaint about Hansells Solicitors and I make no award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr M to accept or reject my decision before 27 April 2026. Alex Mann Ombudsman

-- 5 of 5 --