Harbour Rock Capital Limited · DRN-6205831

The complaint Mr H has complained to Harbour Rock Capital Limited trading as Portafina (‘Portafina’) about advice he received to transfer his employer’s occupational pension scheme (‘OPS’) to a Self- Invested Personal Pension (‘SIPP’) with a firm I’ll refer to as Firm A. He says the advice was unsuitable for him. Mr H is being represented in his complaint by a Claims Management Company (‘CMC’). For ease, I’ll refer to all representations as being made by Mr H. What happened Mr H returned a completed pension information form to Portafina in mid-2021. This allowed Portafina to start its gathering information about Mr H’s pensions so it could complete a pension review. A call took place in September 2021. During this call Mr H initially said that he had called Portafina because he didn’t think his pension was doing very well where it was; it had reduced from around £250,000 to around £230,000 in the past couple of years. And he explained that he was looking to release half the pot to repay his mortgage. He said there was around £89,000 outstanding on his mortgage and he’d be using the remaining funds for home improvements. The call handler also asked Mr H to confirm some further information about his financial situation. Mr H disclosed that he’d been in a debt management plan 20 years ago which had completed about 6 years ago. Portafina spoke to Mr H again in October 2021. During this call Mr H was asked to clarify his objectives for his pension. He wanted to repay his mortgage and a £7,000 loan, with remaining funds being used for a holiday. The call handler said Mr H would have to reconcile with the fact that he would be giving up a guaranteed income in order to take funds so he could do what he was looking to do. The call handler then said this was “fine, we are more than happy to go along with it, we may just not advise it but we need you to just confirm basically that you are definitely happy to proceed on that basis because you know you are going to give up a guaranteed income to take those funds. Is that something you are comfortable with?” Mr H said “yes”, he was comfortable because what the DB scheme was offering him was a little short of £200 per week and he didn’t think that would be enough in his retirement. He believed this amount had been worked out on the basis of him living to 105 years old and he didn’t think he’d live that long. Securing his house for his family was the best thing for him to do so that’s why he had decided to take money from his pension. A fact finding call took place in November 2021 and established the following information about Mr H: • He was 54 years old, married with two children; • He was employed;

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• He was a homeowner and had an interest only mortgage with an outstanding balance of around £88,000 and he had three loans; • He had no savings and credit card debts of £500; • He had a state pension age of 67 but his job was easy so he thought he might not retire at that age; • His attitude to risk (ATR) was recorded as moderately cautious; Mr H had the following pension arrangements: • A DB scheme through his employer, which had a normal retirement age of 65 and a cash equivalent transfer value (CETV) of £228,342.87 as of July 2021. Mr H was a current member of this scheme and it would pay Mr H a guaranteed income in retirement and a death in service lump sum of 3 x his annual basic earnings; • A deferred occupational pension scheme that had been placed in the Pension Protection Fund; During the fact finding call, Mr H said that his financial position would be better in three years’ time and he just wanted to get through now. His main priority was to repay his interest only mortgage so his house was secure, should anything happen to him. He also wanted to clear one of the three loans that he held (the other two having only a couple of years until they’d be repaid). And he wanted to have sufficient funds for a holiday. He later confirmed that he wanted to take £100,000 net from his pension, broken down as £88,000 to repay his mortgage, £7,000 to repay one of the loans and £5,000 for a holiday. The call handler explained the benefits available through Mr H’s DB scheme at retirement. And went on to explain that the scheme offered a transfer value, which would allow Mr H to do something different with his pension but he’d be giving up the guarantees. The call handler also explained that if Mr H opted out of the DB scheme he would have to rejoin his OPS on a different basis, that being a defined contribution basis. Portafina issued a Pension Review Report on 17 November 2021. This set out its recommendation that Mr H leave his DB scheme where it was because of the valuable guarantees he’d be giving up if he transferred. This report went on to set out the benefits Mr H would be giving up in more detail. And it explained how much it would cost Mr H to buy a comparable level of income to that offered by the DB scheme. The report then said: “What happens if you still want to go ahead and transfer against our advice? If you decide you still want to go ahead and do not wish to follow our recommendation, we would need to treat you as an insistent client for the remainder of your pension review. We appreciate that ‘insistent client’ is a bit impersonal. It is a phrase all financial advisers must use to describe a client who instructs them to continue even though it is against their advice. If you instruct us to continue, a member of our pension review team will call you to ensure you understand the reasons for our recommendation and what proceeding against our advice may mean for your future.” A form was included with three options for Mr H to pick from. The first option being that Mr H accepted Portafina’s recommendation and had chosen to leave his DB benefits in the OPS.

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The next two options related to Mr H proceeding as an insistent client but with differing amounts being released from the pension. Mr H picked option 2 - that he wished to continue with the transfer so he could release a total of £129,305 from his pension. Mr H also provided a statement in his own words explaining why he wished to go against the adviser’s recommendation. The form and statement were signed by Mr H on 18 November 2021. Mr H had a further call with Portafina on 23 November 2021. The purpose of this call was to clarify Mr H’s understanding of what he’d chosen to do and the advice he’d been given. Mr H said that he had been advised not to transfer by Portafina. And in terms of his understanding of the pension he currently he held, he said that he didn’t think it was doing very well where it was because both him and his employer had paid in around £35,000 in to it over the past few years yet the value had reduced by £20,000. Mr H also reiterated his comments about the OPS providing a secure payment of less £200 per week but this wasn’t something he was that bothered about. Had that figure been around £500 to £600 per week he would have been bothered. When asked how long the DB scheme would pay out for, Mr H said until he was 105 years old. The call hander clarified that the DB scheme would pay out for as long as Mr H lived. Mr H said he understood that by opting out of his DB scheme he understood that he wouldn’t be able to rejoin that scheme and instead he would be able to join his employer’s defined contribution scheme and he said understood that the benefits of this scheme were not as good as the DB scheme. A Pension review report is on file dated 25 November 2021. This said: “Our recommendation We have already recommended that you do not proceed with transferring your [DB OPS] pension and instead leave your pension funds where they are. However, you have decided to disregard this recommendation and are aware that as a result we must now treat you as an insistent client. As an insistent client you want to proceed with transferring your pension to release a tax-free cash lump sum even though it is against our advice. Therefore, as you have confirmed you wish to proceed, we recommend you transfer your [DB OPS] plan to an [Firm A SIPP] so that you can proceed with releasing a total lump sum of £129,305 against our advice. As you cannot access pension benefits until you reach age 55, we would arrange payment of your pension lump sum after your 55th birthday” The report went on to explain what had been taken into account when recommending that Mr H didn’t proceed with the transfer. It then explained why Portafina was recommending Firm A as Mr H’s pension provider. It also set out the adviser’s comments, which I’ve set out below: “Releasing your pension can have tax implications and affect your standard of living in retirement. I have considered a lot of important factors when making my recommendation including why you need this money, your current circumstances, the specific terms of your current scheme and whether there is another viable way for you to raise the money you need.

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I strongly recommend that you do not proceed for the reasons stated in this suitability report. However, you have confirmed you want to proceed with flexibly accessing your pension. I have therefore recommended transferring to a new scheme which will enable to you to meet this objective, albeit against our advice. By transferring to a new scheme you will be able to access the £129,305 you need. And the remainder of your pension savings will be reinvested for your future. Your [DB OPS] plan has some valuable guarantees, which you will lose if you proceed against my advice. I do not believe the need you have for this money outweighs what you would be giving up and therefore it would not be in your best interests to proceed. The Poised Portfolio that I am recommending is in line with your risk tolerance and term to retirement, and benefits from the inclusion of Dimensional funds. These funds fit with our investment philosophy and spread your risk very widely whilst providing a good opportunity for future growth. I have recommended that you do not release benefits from your [DB OPS] plan on this occasion due to the valuable guarantees attached which will be lost on transfer. More importantly, whilst I do understand you need for capital, this plan is your current workplace plan and we have been informed that you will need to opt out to effect a transfer. The information we have further states that you will not be able to opt back into this scheme. What this means is that you will be losing further accrual of this valuable guaranteed benefit (about 12 years’ worth until your retirement age). This is quite a substantial loss and I do not think it will be prudent or beneficial to do this on this occasion. My advice is that you leave this plan in place to continue to grow both in benefit and value up till your retirement age at which point it can be accessed to pay off your mortgage and any other commitments you may have. This scheme is quite healthy (in terms of its financial strength) so there is no justified reason to worry about the security of your plan. Therefore, you will need to explore ways of further managing your debt profile. As it is you may explore the option of a debt management plan. Furthermore, you may also explore the option of releasing some equity from your property to pay off all your debt and save about £1,500 per month. At retirement, your [DB OPS] plan will be available to access to pay off your mortgage. It is my view that this recommendation will give you a better retirement outcome.” The report also set out Portafina’s recommendation that the transferred funds should be invested in a Poised Portfolio within the Firm A plan. Mr H signed a number of declarations on 30 November 2021, confirming that he wished to proceed against Portafina’s advice. In particular one declaration he signed confirmed: “I am aware that you have recommended I do not proceed. However, I wish to disregard your recommendation and as a result I understand that you will treat me as an insistent client. As an insistent client I still want to proceed against your advice and transfer my pension to release a total of £129,305…to meet my objectives of repaying my mortgage, going on holiday and repaying my debt”

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After Mr H made the decision to go ahead with the transfer the relevant paperwork was completed. A new CETV had to be obtained because the previous one had expired. The new CETV was higher than the previous one at £231.688.71. Portafina completed an updated transfer value comparator (‘TVC’) based on the new lower CETV. And it reiterated its recommendation that Mr H shouldn’t transfer his pension. Mr H signed a ‘Client transfer declaration’ on 5 March 2022. This said: “I am aware that you have recommended I do not proceed. However, I wish to disregard your recommendation and as a result I understand that you will treat me as an insistent client. As an insistent client I still want to proceed against your advice. I am aware that based on my [DB OPS] new transfer value, it could cost £278,000 more to obtain a comparable level of income from an insurer” The transfer of Mr H’s DB scheme completed in April 2022. Mr H took his tax free cash and an additional lump sum later that month. Mr H’s complaint Mr H, through his CMC, raised a complaint with Portafina. He said the advice to transfer his DB scheme had been unsuitable for him. Portafina considered the complaint but it didn’t uphold it. Mr H referred his complaint to our service. An Investigator didn’t uphold the complaint. In summary he said that having tested the advice given against the insistent client rules in place, he was satisfied the rules had been followed; had Mr H not insisted on transferring his DB pension, he would still have it. My provisional findings I issued a provisional decision in February 2026, explaining that I intended to uphold the complaint. I’ve set my provisional findings out below: “Suitability of the advice Portafina says that it followed the correct insistent client process and provided Mr H with a recommendation (not to transfer) that was in his best interests. Mr H says Portafina’s advice was negligent and he’s suffered a loss as a result. The correspondence and paperwork from the time of the transfer states that the transfer of Mr H’s DB scheme wasn’t in his best interests and was not recommended. Despite being repeatedly told throughout the process that Portafina did not recommend he transfer his DB scheme, Mr H opted to proceed anyway as an insistent client. I’ll consider the insistent client process deployed by Portafina in detail below, but as to whether the transfer was suitable, as all parties agree that it wasn’t, I don’t see the need to address this matter in any great detail. In brief, the reasons given to Mr H by Portafina as to why it didn’t consider the transfer to be in his best interests were because: - • Mr H would loss of valuable guaranteed benefits by proceeding • The DB scheme was Mr H’s main retirement provision • Mr H would lose employer contributions and access to his current DB scheme. As I agree with these reasons for why transferring was not suitable for Mr H, I’ve gone on to consider the insistent client process Portafina followed and whether it fairly treated Mr H as an insistent client.

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What is an insistent client? Since 2018, COBS 9.5A includes additional guidance on insistent clients. It defines who is an insistent client and it sets out three key steps for advisers to take. 1. Where a firm proceeds to execute a transaction for an insistent client which is not in accordance with the personal recommendation given by the firm, the firm should communicate to the insistent client, in a way which is clear, fair and not misleading, and having regard to the information needs of the insistent client so that the client is able to understand, the information set out in (2). 2. The information which the firm should communicate to the insistent client is: a) that the firm has not recommended the transaction and that it will not be in accordance with the firm’s personal recommendation; b) the reasons why the transaction will not be in accordance with the firm’s personal recommendation; c) the risks of the transaction proposed by the insistent client; and d) the reasons why the firm did not recommend that transaction to the client. Acknowledgement from the insistent client - COBS 9.5A.4 1. The firm should obtain from the insistent client an acknowledgement that: (i) the transaction is not in accordance with the firm’s personal recommendation; and (ii) the transaction is being carried out at the request of the client. 2. Where possible, the acknowledgment should be in the client’s own words. Was Mr H an insistent client? Having carefully considered all of the evidence presented, and despite the numerous statements made that it was not recommending a transfer, I think there were weaknesses and failings in Portafina’s advice process, which meant it didn’t act in Mr H’s best interests. Firstly, I note that during a call in October 2021, so prior to the fact finding call and the pension review report being issued, Mr H was told that Portafina were “more than happy to go along with it [the transfer], we may just not advise it but we need you to just confirm basically that you are definitely happy to proceed on that basis because you know you are going to give up a guaranteed income to take those funds” So even before Portafina had assessed Mr H’s circumstances and provided full advice, Mr H had been told that it would be happy to arrange the transfer for him. Subsequent to this call and the fact finding call in November 2021, Portafina sent Mr H its Pension Review report. The report contained some details of Mr H’s DB scheme and Portafina said that it strongly recommended Mr H did not proceed with the transfer for the reasons I have set out above.

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Despite setting these reasons out, I don’t think Portafina’s Pension Review report clearly explained to Mr H all risks associated with his preferred course of action. And whilst Portafina sent a further Pension Review report a week or so later - which I note included some additional risks associated with transferring - at the point where Mr H was asked to make a decision on how to proceed, he had minimal information to go on to decide if disregarding Portafina’s advice and proceeding as an insistent client was truly in his best interests. There was an options form enclosed with the first Pension Review report and Portafina asked Mr H to complete the form – thereby making a decision about whether to disregard Portafina’s advice based solely on the information in the first Pension Review report, which as I’ve said above, I don’t think clearly explained all the risk involved so I don’t think put Mr H in a fully informed position. I think that, on the face of it, the form and the letter appear to conform with the regulator’s regulations I’ve set out above. But I’ve thought about whether Portafina genuinely acted within the spirit of the regulations and communicated with Mr H in a way that was fair, clear, not misleading and taking into account his information needs; and I’m not persuaded that it did. There were clearly significant risks to Mr H in proceeding with the transfer and drawing a lump sum (over half the pot) at age 55. One of the main risks being that Mr H would have to leave his existing DB scheme and join his employer’s defined contribution scheme. By doing this, Mr H would not only be giving up his guaranteed pension but he would also lose his death in service benefit and his employer contributions to his DB scheme. After Mr H had returned his options form confirming that he wished to proceed on an insistent client basis, Portafina sent another more detailed Pension Review Report. This reiterated the previous reasons for not recommending the transfer and it included the following additional reasons: • Mr H’s debt was manageable. • The cash value required to purchase a like for like income the same as the DB scheme on the open market was significantly higher than the transfer value offered. Whilst the Pension Review report set out these risks and stated that the transfer wasn’t in Mr H’s best interests, there was no further information or advice given about the benefits he was giving up and what they actually meant for Mr H in practice and the risk he was exposing himself to if he went ahead and lost them. The evidence I’ve seen – and to which I have referred above – indicates that, at the time he was being asked to sign the options form, Mr H didn’t fully understand the benefits he would receive from his DB scheme. I say this having listened to the call recordings Portafina has provided and which I’ve summarised above. In particular Mr H said that he didn’t think the DB scheme was doing very well where it was because both him and his employer had paid in around £35,000 into it over the past few years yet the value had reduced by £20,000. These comments suggest to me that Mr H didn’t have a full understanding of how his DB scheme worked and that the transfer value didn’t have any impact on the benefits Mr H would receive from the scheme at retirement. During this call, Mr H also said he wasn’t bothered about the OPS providing a secure

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payment of less £200 per week but had that figure been around £500 to £600 per week he would have been bothered. I’ve seen no evidence that Portafina explained to Mr H in a meaningful way that the pension figures for his DB scheme were based on what he was entitled to at that point; no detailed explanation was given or figures provided for how much Mr H’s pension would accrue if he remained in the DB scheme for a further 10 years until his normal scheme retirement age. This was important information that Mr H needed in order to make a fully informed decision. And no detailed explanation was given about the death in service benefits Mr H would be losing by leaving the DB scheme. Again, I think this was an important consideration for Mr H, particularly as his main reason for transferring and accessing his fund at that time was repay his mortgage so his home was secure should anything happen to him. The death in service payment that Mr H was entitled to from his DB scheme would have more than covered Mr H outstanding interest only mortgage if he passed away while still employed. I’m also not satisfied that Portafina adequately considered alternatives to transferring away from the DB scheme with Mr H, including moving to a repayment mortgage or extending his existing interest only mortgage. Although Mr H said that he had previously been in a debt management plan, this had been set up 20 years prior to the advice and had been repaid for more than 6 years. So, there was nothing to suggest Mr H still had a bad credit rating and would be unable to renew his mortgage. And while Mr H may have said that he didn’t want to take a further mortgage, I think Portafina ought to have challenged this and explored options for his mortgage in more detail. Another reason Mr H gave for wanting to transfer and access his fund was to repay one of the loans that he held. However, Mr H’s debt was manageable, as acknowledged by Portafina. Two of the loans would be repaid within the next couple of years in any event, which would immediately increase Mr H’s disposable income. But again, Portafina didn’t explore this further with Mr H which I think it ought to have done. I can entirely understand why Mr H would want to repay his mortgage and loan. But when establishing if he was truly an insistent client who wanted to act against Portafina’s advice, I think Portafina should have challenged Mr H’s perception of how beneficial it would be to do this by transferring his DB scheme, and potentially leaving himself worse off in retirement. As I’ve said above Mr H was able to afford his mortgage and loan repayments and his disposable income would be increased fairly significantly within the next couple of years. And had he remained in the DB scheme until retirement, he could potentially have used his tax free cash at that time to repay his interest only mortgage. DB pensions are a valuable resource and their benefits are often considered to be difficult to match (at a similar cost) compared with other pension products available on the open market. And transferring from a DB scheme is a one-off event; once transferred there’s no going back – the benefits are lost forever. So, when giving DB pension transfer advice Portafina’s role wasn’t to simply to facilitate what Mr H wanted it to do, no matter how convinced he was that a transfer was suitable for him. Instead it was required to understand his wants and needs, not just his wishes and desires. And, in order to allow Mr H to arrive at a fully informed opinion it needed to give him all the relevant information. But in this instance Portafina didn't explore all of Mr H’s options with him.

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Further, I think the manner in which Portafina presented some of its information was unclear. For example, its 25 November 2021 Pension Review report repeated that Mr H intended to disregard its recommendation not to transfer. However, it then made a recommendation that he do exactly that. That is to transfer his DB benefits to a named SIPP provider. It's evident that Mr H was keen, from the outset, to transfer his DB pension. Clearly he believed that this would be more beneficial for him that remaining in his the DB scheme. And Portafina did say that its recommendation was that he shouldn’t do that. But it strikes me that Portafina’s process was geared towards facilitating the transfer from the outset. It gave him information from an early stage that it would be able to help him transfer and access funds. Overall, and on balance, I don’t think it would be reasonable for me to conclude the process Portafina followed meant that Mr H can truly be regarded as an insistent client. It follows that I think that, if Portafina had conducted a thorough and robust advice process, giving Mr H all the information he required at an early stage, the outcome would have been different. That’s because I think Mr H would have realised that the benefits of the transfer were seriously outweighed by what he stood to lose and that he might have other more suitable options. In those circumstances I think it’s unlikely he would have wished to proceed as an insistent client. It follows that I find it’s more likely than not that if Portafina had done all that it should have done, Mr H would not have transferred out of his DB scheme. So I don’t need to consider the suitability of the investments Portafina recommended he hold within his SIPP. Those investments wouldn’t have arisen if Portafina had conducted the advice and insistent client process thoroughly. In light of the above, I think Portafina should compensate Mr H for its failings using the regulator's defined benefits pension transfer redress methodology” Mr H responded and confirmed that he accepted my provisional decision. Portafina disagreed with my findings. I’ve summarised it’s submission below: • Mr H primarily steered this transaction. He contacted Portafina in the first instance letting it know that he wished to release funds to clear his mortgage and additional debt; • The year after the transfer, Mr H proceeded to fully strip his pension, declining to take advice at the time. He has now run out of money within this pension and it appears that he may be looking for someone else to compensate him; • The suitability report set out what Mr H would be entitled to at retirement, not at that point in time as the provisional decision had stated. It stated that at retirement Mr H would be entitled to an income of less than £200 per week, which was less than Mr H had said was worthwhile; • Portafina specifically recommended that Mr H consider alternative options, including waiting until retirement to repay his mortgage, waiting until retirement to access his pension and releasing equity from his home to repay his mortgage; • Mr H has confirmed that he had bad credit as a result of his previous debt management plan. I’m now in a position to issue my final decision.

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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. Having now reviewed everything again, I remain of the view that the complaint should be upheld for the reasons set out above in my provisional findings. I don’t intend to repeat those findings in full here. Instead, I’ve focused on addressing Portafina’s final submissions. When considering this complaint I’ve taken into account relevant law and regulations, regulator’s rules, guidance and standards and codes of practice, and what I consider to have been good industry practice at the time. This includes the Principles for Businesses (PRIN) and the Conduct of Business Sourcebook (‘COBS’). And where the evidence is incomplete, inconclusive or contradictory, I reach my conclusions on the balance of probabilities – that is, what I think is more likely than not to have happened based on the available evidence and the wider surrounding circumstances. The applicable rules, regulations and requirements 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 Portafina'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. The regulator, the Financial Conduct Authority (‘FCA’), states in COBS 19.1.6G that the starting assumption for a transfer from a DB scheme is that it is unsuitable. So, Pension Access should have only considered a transfer if it could clearly demonstrate, on contemporary evidence, that the transfer was in Mr H’s best interests. And having looked at all the evidence available, I’m not satisfied it was in his best interests. Portafina accepts that its insistent client process wasn’t ideal and I’m pleased to hear that it has now updated this process. And I accept that it was Mr H that instigated matters; he contacted Portafina as he wanted to access his pension to repay his mortgage. But having reviewed everything again, I’m still not satisfied that if Portafina had conducted a thorough and robust advice process, giving Mr H all the information he required at an early stage, that he would have insisted on transferring. In my provisional decision I said that I hadn’t seen evidence that Portafina explained to Mr H in a meaningful way that the pension figures for his DB scheme were based on what he was entitled to at that point; no detailed explanation was given or figures provided for how much Mr H’s pension would accrue if he remained in the DB scheme for a further 10 years until his normal scheme retirement age.

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Portafina has disputed this, it says the figures quoted in its suitability report were based on what Mr H was entitled to at retirement. However, having considered this further, I don’t think this is entirely accurate. I’ll explain why. The suitability report stated that at age 65 Mr H would be entitled to a pension of £12,027pa or £8,147pa if he took tax free cash. It’s not clear where these figures came from as they don’t seem to align with the information on file that the DB scheme provided to Portafina. However, even if they did align, I don’t think they accurately show the position Mr H could have been in at retirement, had he remained a member of the DB scheme for a further 10 years and had continued to accrue benefits. I say this because on 5 August 2021 the DB scheme sent Portafina an early retirement quotation. This stated that it was based on the following: Pensionable Service as at 19/03/2022: 15 years 10 months Pensionable Service as at 19/03/2032: 25 years 10 months Final Pensionable Salary: £36,458.08 The quotation went on to set out at that at age 55 Mr H would have been entitled to a full pension of £7,211.39. Or a tax free lump sum of £34,241.14 and a total reduced annual pension of £5,136.17. And at age 65 (normal scheme retirement age) a full pension of £15,419.91. Or a tax free lump sum of £69,638.31 and a total reduced annual pension of £10,445.75. The updated transfer value statement the scheme issued in early 2022 set out that, at that time, Mr H would be entitled to a pension of a little over £10,000 per annum at retirement, based on what he had built up in the scheme at that point. So overall, I think it would have been more accurate for Portafina to have explained to Mr H that he would have been entitled to a full pension of a little under £15,500 if he remained a member of the scheme until he retired. Again, I think it’s likely this figure would have been even higher as it was based on Mr H’s salary at that time and not what his expected salary would be at the age of 65, some 10 years later. Portafina didn’t explain any of this to Mr H and I think this was important information he needed to know in order to make an informed decision about his pension. Portafina has also said that it specifically recommended that Mr H considered alternative options for repaying his mortgage and I accept that it did mention alternatives during calls with Mr H. But these weren’t explored in any detail, like I would have expected Portafina to have done. It was more of a tick box exercise, mentioning that Mr H could release equity or take a further mortgage. That was the same with Mr H’s credit rating. Mr H may have previously had a bad credit rating because he’d been in a debt management plan. But this had been settled some six years before Mr H received advice. So unless Mr H had experienced further issues since, the debt management plan was unlikely to have still been having a negative impact on his credit rating. Again, Portafina didn’t explore this any further with Mr H. Portafina should not merely have accepted Mr H’s viewpoint without challenge. Although I accept that Mr H had limited disposable income, he was managing his finances and two of his loans were coming to an end within the next couple of years, which would increase his disposable income considerably. So I don’t think it was worth giving up the valuable guaranteed income the DB scheme offered Mr H in retirement in order to be mortgage free at that time.

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I appreciate what Portafina has said about Mr H taking his tax free cash and then drawing the remainder of his pension funds the following year. However, Mr H wouldn’t have been in a position to access his pension fund had it not been for Portafina’s involvement. I’ve thought very carefully about whether, if Portafina had done all it should have and, in particular, given him clear details about his pension entitlement, what he was giving up by opting out of his DB scheme and not made the insistent client route so easy for Mr H to take, he’d have gone ahead with the transfer anyway. I reach my conclusions about that on the balance of probabilities – that is what I think is more likely than not to have happened, based on all the available evidence and the wider circumstances. A decision on that sort of issue can be finely balanced. We decide each complaint on its own individual facts and circumstances and cases which might appear similar won’t always be decided in the same way. Here Mr H’s focus was, understandably, on the prospect of receiving substantial cash to repay his mortgage. But, in my view, Portafina’s process underplayed the significance of proceeding against the recommendation not to transfer. And it didn’t do enough to challenge Mr H as to whether repaying his mortgage, rather than renewing it, was really necessary. On balance, I’m not persuaded that Mr H would’ve still insisted on transferring had Portafina’s approach been more balanced, if its insistent client process had been more robust and if it had explored things further with Mr H as to whether he really needed to access his pension savings early. So Portafina should compensate Mr H for any losses he’s suffered in consequence of transferring out of the DB scheme. Putting things right A fair and reasonable outcome would be for the business to put Mr H, as far as possible, into the position he would now be in but for the unsuitable advice. I consider Mr H would have most likely remained in the occupational pension scheme if suitable advice had been given. Portafina must therefore undertake a redress calculation in line with the rules for calculating redress for non-compliant pension transfer advice, as detailed in policy statement PS22/13 and set out in the regulator’s handbook in DISP App 4: https://www.handbook.fca.org.uk/handbook/DISP/App/4/?view=chapter. For clarity, Mr H has not yet retired, and he has no plans to do so at present. So, compensation should be based on his normal retirement age of 65, as per the usual assumptions in the FCA's guidance. This calculation should be carried out using the most recent financial assumptions in line with DISP App 4. In accordance with the regulator’s expectations, this should be undertaken or submitted to an appropriate provider promptly following receipt of notification of Mr H’s acceptance of my decision. If the redress calculation demonstrates a loss, as explained in policy statement PS22/13 and set out in DISP App 4, Portafina should: • calculate and offer Mr H redress as a cash lump sum payment, • explain to Mr H before starting the redress calculation that:  their redress will be calculated on the basis that it will be invested prudently (in line with the cautious investment return assumption used in the calculation), and  a straightforward way to invest their redress prudently is to use it to augment their DC pension

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• offer to calculate how much of any redress Mr H receives could be augmented rather than receiving it all as a cash lump sum, if Mr H accepts Portafina’s offer to calculate how much of their redress could be augmented, request the necessary information and not charge Mr H for the calculation, even if he ultimately decides not to have any of their redress augmented, and • take a prudent approach when calculating how much redress could be augmented, given the inherent uncertainty around Mr H’s end of year tax position. Redress paid directly to Mr H as a cash lump sum in respect of a future loss includes compensation in respect of benefits that would otherwise have provided a taxable income. So, in line with DISP App 4.3.31G(3), Portafina may make a notional deduction to allow for income tax that would otherwise have been paid. Mr H’s likely income tax rate in retirement is presumed to be 20%. In line with DISP App 4.3.31G(1) this notional reduction may not be applied to any element of lost tax-free cash. My final decision For the reasons explained, I uphold this complaint and direct Harbour Rock Capital Limited trading as Portafina to calculate and pay redress as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 3 April 2026. Lorna Goulding Ombudsman

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