The UK’s Pensions Ombudsman and the Financial Ombudsman Service (FOS) have both found in favour of Phoenix Life in two recent complaints.
In the FOS complaint, Mr H said that Phoenix Life Assurance mis-sold his pension, charged him too much commission and failed to deliver on promised returns.
Mr H took out two pension policies with Phoenix in 1996, both of which were invested in a with-profits fund.
In 2017, he complained to the insurer that the charges associated with setting up the plans and ongoing performance had impacted his returns.
Phoenix did not uphold the complaint, stating that the advice Mr H had been given was appropriate. It added that the performance of the plans was not guaranteed.
Phoenix acted reasonably
At the initial stage, the FOS investigator concluded that Phoenix had dealt with Mr H’s complaint fairly.
Mr H did not agree and the complaint was escalated to ombudsman Alison Cribbs, who reached the same conclusion as the investigator.
She wrote: “The fact find showed that Mr H had a balanced attitude to risk. He was advised to invest in the with-profits fund. I agree with the investigator that this was reasonable, based on Mr H’s objectives.”
Cribbs also stated that the costs “are not excessive or unfairly high”.
“I’m satisfied that Phoenix took reasonable steps to bring the charges to his attention.”
In conclusion, she wrote: “Unfortunately, actual investment growth has been lower than was expected. This may mean that Mr H has received less from his plan than he had hoped.
“But this doesn’t automatically mean that the plans were mis-sold.”
Better performance in a low interest bank account
In the second ombudsman decision, Mr S complained that Phoenix Life had not invested his pension fund appropriately, as other funds with the insurer achieved a higher performance.
In 1988, Mr S received advice from a Phoenix Life representative to take out a retirement annuity contract.
His complaint to the Pensions Ombudsman was that his funds would have achieved higher growth in a low interest bank account and he did not recognise this sooner as he did not receive annual statements after 2005.
Responsible for managing own affairs
At the initial stage, an adjudicator determined that it was Mr S’ responsibility to ensure the investments remained suitable for him and that he should have acted sooner to ensure he was receiving statements about his annuity.
The issue was discovered to be a missing word in Mr S’ address, which Phoenix corrected and paid £100 ($127, €112) for any inconvenience caused.
“Mr S ought to have recognised sooner that he was no longer receiving annual statements, and could have contacted Phoenix Life as early as 2006 to notify it of the issue,” the adjudicator wrote.
The issue of advice
Mr S contended in his initial complaint that Phoenix Life should be held accountable for the advice he was given.
However, complaints about financial advice and the suitability of financial products are outside the jurisdiction of the Pensions Ombudsman and could not form part of its response.
Should have taken action sooner
Mr S disagreed with the adjudicator’s findings and the case was passed to ombudsman Anthony Arter, who did not uphold the complaint.
“I do not consider that there has been a financial loss as a result of the address error,” he wrote. “The policy is a personal pension, which means Mr S is responsible for managing his investments, or employing a financial adviser to do so on his behalf.
“Had Mr S taken action to rectify the missing statement, he could have decided much earlier that he was unhappy with the performance and taken steps to mitigate this.”