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Defined Benefit Pensions Battle: Portafina Loses First Round to FOS

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Following recent news that financial adviser, Portafina (now known as Portal Financial Services) has stopped accepting new clients, the firm has now lost the first leg of its legal battle against the Financial Ombudsman Service (FOS).

Consumer Complaints

A significant number of consumers have previously complained to the Ombudsman about the advice they received from Portal/Portafina to transfer their Defined Benefit pension policies into Self Invested Personal Pensions (SIPPs). Defined Benefit (DB) pensions, also known as final salary or company pensions, are a very dependable form of retirement income – transferring out of them is rarely good advice.

Once the monies were transferred into the SIPP, another firm, Cherish Wealth Management then went on to provide investment advice. Ultimately, the majority of consumers’ funds were invested in high risk and illiquid products resulting in significant losses for investors.

In line with regulatory guidance, the Ombudsman upheld the consumers’ complaints, finding Portal/Portafina liable not only for the transfer advice but also for the underlying unsuitable investments made, despite the involvement of Cherish Wealth Management.

A pattern among upheld FOS complaints that TLW Solicitors has seen, is that financial advice is given to invest in complex and high-risk, sometimes unregulated, funds that appear completely unsuitable to a client’s needs and investment experience.

  • Raithwaites Hypa Fund
  • Hypa Asia Fund
  • Venture Oil International
  • EOS Solar Energy
  • JP SPC Koroni Fund
  • Biomass Investments
  • Brisa Investments
  • Strategic Residential Dev
  • Lakeview UK Investments
  • Marbella Resort & Spa
  • Real Estate Investments USA
  • Motion Picture Global Investments
  • Strategic Residential Developments
  • Tambaba Investments

As it did not agree with FOS’ findings, particularly the Ombudsman’s view that it was responsible for the investments made, Portal/Portafina made an application to the Court for Judicial Review, with a view to challenging the FOS decision. Judicial Review is a significant legal step where a senior Judge decides if the decision made by a public body, in this case, FOS, was lawful or not.

Portal/Portafina’s application has now been heard by the Court. The Judge held that Portal/Portafina did not have a valid basis upon which to bring a Judicial Review, refusing the application on all grounds.

Head of Professional Negligence at TLW Solicitors, Sarah Spruce said:

“Whilst this is positive news for consumers, Portal/Portafina has since confirmed that it intends to appeal the Court’s decision. In turn, FOS has confirmed that it intends to defend the appeal. The team at TLW Solicitors eagerly await the next stage of the case. In the meantime, if Portal/Portafina or Cherish/Wealth/Shah Wealth were involved in the transfer of your pension, please feel free to contact TLW Solicitors’ Professional Negligence Team for a no-obligation chat to see if we can help.”

TLW Solicitors are specialists in claiming compensation for those who have been mis-sold pension investments. Members of the team specialise in cases where investors have received unsuitable advice to transfer out of a Defined Benefit (DB), company or final salary pension scheme.

You can contact TLW Solicitors by calling 0800 169 5925, emailing info@tlwsolicitors.co.uk or completing the call back form below.

Time limits can apply, so anyone wishing to bring a claim should do so without delay.

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