Approved Minimum Retirement Fund AMRF Decision Reference 2024-0217

• Case Outcome: Rejected
• Year: 2024
• Reference: 2024-0217
• Date: 22 October 2024
• Subject Matter: Approved Minimum Retirement Fund AMRF
• Finantial Sector: Investment
• Conducts Complained Of: Delayed or inadequate communication,Failure to process instructions, Failure to process instructions in a timely manner, Failure to switch to safe fundnear retirement, Switching funds

Decision Ref:

2024-0217

Sector:

Investment

Product / Service:

Approved Minimum Retirement Fund AMRF

Conduct(s) complained of:

Delayed or inadequate communication

Failure to process instructions in a timely manner

Failure to process instructions

Switching funds

Failure to switch to safe fund near retirement

Outcome:

Rejected

LEGALLY BINDING DECISION OF THE FINANCIAL SERVICES AND PENSIONS OMBUDSMAN

This complaint concerns the Provider’s suggested delay or failure to act on the instructions

of the Complainant, thereby causing a loss to the value of his pension fund, and a

complaint about poor advice.

The Complainant’s Case

The Complainant says that his pension policies were set up in 2014 through the Provider,

which is a financial advisor. He was in his early 60s at that time.

The Complainant says that, some five years later, in July 2019, he received a telephone call

from the Provider and that he informed the Provider that he wished to invest in a self-

administered fund during the following year, because he was worried that the value of his

investment “could fall before [he] could move it”.

The Complainant says that as a consequence of his discussions with the Provider, it advised

him to transfer his total fund (€169,964.09) to an alternative pension provider, as it was

charging a 0.7% management fee - as distinct from a 1.3% management fee which was

charged by the Complainant’s existing pension provider.

The Complainant says that the advice offered by the Provider to transfer the fund, would

have tied him to another pension provider for the next 5 years.

- 2 -

/Cont’d…

The Complainant says that it would have been “unwise” of him to transfer the fund to

another pension provider, given that he intended to withdraw his funds during the

following year, and this would have resulted in more than €8,000.00 in charges being

incurred.

The Complainant says that the Provider gave that advice to him to switch providers, “for

the sole purpose of generating commission for [the] firm”.

The Complainant also says that the Provider failed to act on his instructions and that it

delayed in placing his pension into a cash fund, with his existing pension provider. In his

letter of 9 October 2019, the Complainant said that the Provider’s actions had caused him

a loss of €7,704. The Complainant also says that it was difficult for him to obtain

information from the Provider.

The Complainant wishes to be compensated in the amount he says was lost, in the value of

his pension fund, in the period between Friday, 2 August 2019 and Thursday, 8 August

2019.

The Provider’s Case

The Provider says that it contacted the Complainant in July 2019 to review his pension

requirements, and it transpired from that conversation that the Complainant’s “objectives

and appetite had changed” and that he “expressed a more cautious or cash type of fund”.

The Provider denies that the Complainant informed it of his intention to invest in a self-

administered fund. It maintains that it discussed the option of switching within the

current plan, or the option of looking for a more cost-effective strategy with other

providers.

The Provider says that it suggested switching the fund to the alternative pension provider,

because this would have saved the Complainant approximately €1,000.00 per annum in

charges. The Provider says that the Complainant never instructed it to make that switch to

the alternative pension provider, or to switch to a cash fund with his existing pension

provider.

The Provider says that it was forthcoming with information and that any delay that ensued

was because of the time taken by the Complainant in making a decision. The Provider

denies that it gave any advice for the sole reason of earning a commission.

The Provider also says that on 2 August 2019, the Complainant’s pension fund paid the

Complainant a gross income of €3,622.95 and the remaining €4,080.27 claimed by the

Complainant as a loss in his investment value, arose due to the market movements

between 2 August 2019 and 8 August 2019 in the value in the pension’s underlying funds.