DRN-6040889

The complaint Mr E is unhappy that Harbour Rock Capital Limited (HRC) is claiming payment of an invoice for advice Portafina (a predecessor firm) gave regarding a pension transfer in 2022/2023. Mr E doesn’t consider he should have to pay for the advice. He says, due to delays caused by HRC and the ceding scheme, he lost out financially as his pension fund had reduced by around £60,000 by the time the transfer went ahead. For ease of reading I’ve referred to HRC throughout, references to which should be taken as including Portafina where the context so requires. What happened Mr E was a deferred member of a former employer’s defined benefit (DB) pension scheme. On 30 November 2021 he got a CETV (cash equivalent transfer value) from the DB scheme of £197,285 which was guaranteed until 28 February 2022. Mr E needed regulated financial advice as he was considering transferring the value of his DB scheme to a personal pension plan to raise funds in connection with a divorce. HRC wrote to Mr E on 23 June 2022, saying Mr E had chosen to take abridged advice – a free service where HRC would give an initial indication of what Mr E should do with his pension. HRC’s charges were set out. Full advice would cost £11,364.25. That was stated to be subject to change as the advice fee is calculated at the time of the advice using a percentage scale and based on the transfer value at that time and the type of product advice was provided on. HRC also said: ‘This is our full financial advice service in which a fee is payable regardless of whether our recommendation is to transfer or not. This consists of a full review of your pension, taking into consideration scheme analysis, your personal and financial circumstances and intentions for releasing cash to determine whether transferring is in your best interests. This will either result in a personal recommendation for you to remain in your [DB] scheme or to transfer if this is the right thing for you. If after receiving our advice you wish for us to transfer your pension, our fee can be deducted from your pension fund upon transfer. If a transfer is not recommended or facilitated, our advice fee is payable by you upfront regardless.’ Mr E was given a booklet, ‘About Our Services’, which contained HRC’s Terms of Business (TOB). Section 9 dealt with HRC’s charges, including for ‘Focussed Advice Services’, such as reviewing pension arrangements. In that case, the adviser fee, calculated at the time of the advice, would be based on the scale set out, depending on if the existing pension was a DB or DC (Defined Contribution) scheme. Examples were given. Example 3 was a client taking advice regarding a DB transfer with a CETV of £150,000. The fee would be £9,000 and details of how that was calculated were given. HRC issued an abridged advice report on 28 June 2022, recommending that Mr E remain in the DB scheme. The report said that the fee for full advice would be £11,364.25 based on the current transfer value. Once Mr E had chosen to use the full pension transfer advice

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service, he’d be committed to paying that charge. Payment options were also set out. Including that, if HRC advised Mr E not to transfer and he disagreed with that and chose to transfer anyway as an ‘insistent client’, HRC’s fee would be deducted from the pension on transfer. Mr E signed a declaration on 29 June 2022 which said: ‘I do not intend to follow your recommendation and wish to proceed to full pension transfer advice to continue to consider transferring my pension. I understand that I cannot transfer unless I take full pension transfer advice. I am aware this advice will cost me £11,364.25 – the equivalent of around 26 months’ income from my current scheme. I understand that the outcome of this chargeable advice could result in a recommendation to stay in my current scheme. In this instance HRC would still facilitate the transfer against their advice, if I insisted.’ On 12 July 2022 HRC issued a pension review report recommending that Mr E didn’t transfer his DB scheme. On page 10 HRC said its advice fee was now due. The fee for the full pension transfer advice was £11,364.25. If Mr E agreed with the advice and didn’t wish to transfer, the fee was payable direct within 30 days. But, if he intended to instruct HRC as an insistent client, the fee would be payable on transfer and could be taken direct from the pension. Mr E told HRC that he wanted to disregard the advice and proceed on an insistent client basis. On 22 July 2022 HRC sent Mr E an invoice for £11,364.25. But it repeated what had been said earlier about ignoring the invoice if he returned his application forms to transfer his DB pension within 30 days of the date of the suitability report. HRC sent a further pension review report to Mr E on 25 July 2022. It said HRC had already recommended that he didn’t proceed with releasing his DB scheme benefits as a lump sum payment and instead he should leave his pension funds where they were. However, he’d decided to disregard that and was aware that, as a result, HRC had to treat him as an insistent client who wanted to proceed with releasing his entire pension fund, even though it was against HRC’s advice. There was a section, on page 13, about HRC’s adviser fee which came to £11,364.25. Again, it was payable within 30 days of the report or could be deducted from the transfer value if it went ahead. What the fee covered was also set out as follows. ‘All the work we have done so far in order to make our recommendation. ✓ Our recommendation itself and the protection that comes with it. ✓ Access to the Financial Ombudsman Service in the event of a problem. ✓ The setup of your new pension, funds and all transfers from your current scheme. ✓ Payment of your pension money to you.’ Mr E signed and returned a declaration on 29 July 2022. He confirmed, amongst other things, that HRC had recommended that he didn’t transfer but he wanted to disregard that recommendation and as a result he understood he’d be treated as an insistent client. Above where he signed, the declaration said he was fully aware of and agreed to the charges and fees detailed in the suitability report.

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By then the CETV issued on 30 November 2021 had expired. In August 2022 Mr E paid a fee of £300 for a new CETV which was issued by the DB scheme on 7 October 2022. The CETV, which was guaranteed for three months, had fallen to £131,380. Mr E was unhappy with how long the transfer was taking and that the CETV had dropped. He complained to HRC by telephone on 29 November 2022. HRC issued a final response letter on 13 December 2022. HRC said the complaint about the reduction in the CETV had been forwarded to the DB scheme. HRC maintained it wasn’t responsible for the fall in value. HRC said Mr E had the right to refer the matter to this service, but he needed to do so within six months of the date of HRC’s letter. On 9 February 2023 the DB scheme responded to Mr E’s complaint about delay and the reduction in the CETV. The complaint was partially upheld. Mr E had paid the fee for a revised CETV on 16 August 2022, but the new CETV wasn’t provided until 7 October 2022. The new CETV could’ve been provided around the time Mr E had paid for it. The DB scheme actuaries had been asked to re-calculate the CETV using the factors applicable in August 2022. That had produced a revised CETV of £159,633 which the DB scheme would pay if Mr E wished to proceed with the transfer. Mr E emailed HRC on 21 February 2023 saying he no longer wished to use HRC’s services. He wanted to make a formal complaint about the length of time the transfer had taken and the reduction in the CETV. HRC said it had already responded to that complaint and attached a copy of the final response letter it had issued earlier. However, it seems that HRC had also asked the new provider to return the transfer value to the DB scheme which Mr E was unhappy about. After looking into what had happened, HRC agreed there’d been some confusion which had caused Mr E stress and anxiety. HRC offered £500 which Mr E accepted. Mr E referred his complaint about HRC – delay and the reduction in the CETV – to us. But that wasn’t until 22 May 2024. We said the complaint had been made too late and we couldn’t consider it – HRC’s final response letter had been issued on 13 December 2022, giving Mr E six months from then to refer his complaint to us. So he had until 13 June 2023. But we weren’t notified of the complaint until 22 May 2024. In July 2025 Mr E made a new complaint to HRC. He’d received HRC’s letter of 8 July 2025 asking him to pay an overdue amount of £9,481.65. The letter enclosed copies of the declarations Mr E had signed and said that his fee had been reduced. The updated fee was £9,481.65. HRC had used the recalculated CETV of £159,633 paid by the DB scheme to calculate the advice fee. Hence HRC was claiming £9,481.65 from Mr E, not £11,364.25. On 10 September 2025 HRC issued a letter to Mr E, apologising that it hadn’t been able to reply to his complaint and giving him referral rights to this service. HRC issued its final response letter on 19 September 2025. In summary, HRC said Mr E’s concerns about the handling of the transfer had already been considered and HRC wouldn’t consider that again. HRC said it hadn’t made a mistake by sending Mr E the invoice because, although he was unhappy with the service, the advice had been provided. It had been made clear to Mr E throughout the advice process that the fee would be charged, regardless of the advice he was given. In response, Mr E acknowledged he’d signed an agreement to pay £11,364.25, but that was based on a fund value of £197,285. He’d returned all the necessary paperwork within the correct timeframes. The delays between HRC and the DB scheme had resulted in a reduction of approximately £66,000 to his pension fund. HRC replied to Mr E on 25 September 2025 but HRC’s position was unchanged.

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Mr E referred the matter to us on 13 October 2025. He wanted his previous complaint reopened. But he later confirmed he was making a new complaint about fees claimed by HRC, even though he’d ceased to use their services. He added that, due to incompetency and delays by HRC and the DB scheme, there’d been a shortfall of over £60,000 for which HRC owed part payment as the DB scheme had paid him compensation of £30,000. The complaint was considered by one of our investigators but she didn’t uphold it. She said the issue to determine was whether HRC had acted incorrectly by insisting on payment for advice despite Mr E’s dissatisfaction and fund loss. Her main points were: • The abridged advice summary document clearly stated, if Mr E proceeded to full pension transfer advice, he’d be charged £11,364.25. He’d signed to say he understood the advice might be to remain in his DB scheme, but the fee would still need to be paid. • The abridged advice report also said, once Mr E chose to move to full transfer advice, he’d be committing to pay the charge to HRC for that. It was made clear to Mr E, prior to him opting to receive full transfer advice, that he’d need to pay for it. • HRC had explained in its full transfer report how it charged for full transfer advice. It said the fee was based on the total transfer value of the pension fund. A table was set out showing the size of the pension pot and the percentage charge, depending on if it was a DB or DC scheme. • Mr E had told HRC that he no longer wished to use its services. But that didn’t relieve him of the obligation to pay for the advice he’d received. Section 10.7 of the TOB said, about termination of services: ‘You can terminate an agreement based on these terms at any time by giving written notice. We may also terminate this agreement at any time at our absolute discretion. You will pay any of our fees due to the date of termination on a pro-rata basis.’ Mr E had entered into an agreement with HRC and confirmed he’d pay for the full transfer advice which HRC provided and then asked Mr E to pay for. Mr E didn’t agree with the investigator’s view and made the following main points: • The declaration he’d signed in July 2022 for an advice fee of £11,364.25 was based on the value of his pension pot being £197,285. That valuation was fundamental to his decision and agreement. The subsequent reduction of approximately £66,000 wasn’t down to any delay or failure on his part. The delays were between HRC and the DB scheme who’d accepted partial responsibility. HRC should bear the remaining responsibility. • He’d asked for transcripts of call recordings to be provided but he’d been waiting about three years for them. • He was highly dissatisfied with the service provided and the repeated delays, and as a result, he terminated the agreement part-way through. Despite this, HRC compounded matters by returning his pension fund to the DB scheme without his consent, causing additional confusion and delay. As only part of the contracted service was delivered, at most only a proportionate fee should be payable. • 5% of £131,000 equates to £6,550, not £11,364.25. He wanted to know why he was being charged almost double that amount. • He’d never received an invoice until now, more than three years after the event. He

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didn’t know why the fee wasn’t deducted from the pension at the time, or why it had taken so long for the demand to be issued. • He also queried why it had taken TPO (the Pensions Ombudsman) over a year to tell him he should’ve approached this service instead, by which time the six month time limit had expired. As agreement couldn’t be reached, the complaint was referred to me to decide. 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. I’ve set out the background in some detail as it’s not entirely straightforward. But having considered everything, my views are similar to the investigator’s and I’m unable to uphold the complaint. I know Mr E will be disappointed. I understand his unhappiness about the time the transfer took and the reduction in the CETV. And, given that the other party involved, the DB scheme, accepted there was delay on its part and uplifted the CETV which covered about half of the reduction in value, I can see why Mr E might expect HRC to meet the balance. But, as the investigator has explained, we’re unable to consider Mr E’s complaint about how HRC handled the transfer, including if there was any delay by HRC, as that complaint was referred to us too late – more than six months after HRC issued its final response letter on 13 December 2022. Mr E has also queried why TPO took over a year to tell him he should’ve approached this service instead. HRC’s final response letter dated 13 December 2022 set out what Mr E could do if he was unhappy with HRC’s decision – it said he could refer the matter to this service. It may be that there was some confusion as the DB scheme’s response to his complaint may have included referral rights to TPO, not this service. But as HRC’s final response letter did specify this service, I don’t think HRC did anything wrong. I’ve also considered the email exchanges between Mr E and HRC in February/March 2023. Mr E said that he’d be making a formal complaint to TPO. In an email dated 27 February 2023 HRC referred Mr E to HRC’s final response (a copy of which was attached) and said that it set out Mr E’s options if he was unhappy with HRC’s findings. In his response Mr E said he’d be forwarding all correspondence to TPO for them to investigate. In HRC’s email of 2 March 2023 HRC said that Mr E’s complaint about the drop in value of his DB pension would have to be dealt with by this service. HRC did make it clear to Mr E that he’d need to refer his complaint about HRC’s alleged delay and the reduction to the CETV to this service. All that means I can’t approach Mr E’s complaint about HRC’s fee from the perspective that HRC delayed in processing the transfer which meant Mr E lost out financially because the CETV was lower. Looking at the current complaint, about HRC’s fee, Mr E initially took abridged advice from HRC. That’s an initial assessment, often offered for free, as HRC did here. HRC went on to provide full advice, for which HRC did charge. The complaint comes down to whether the fee that HRC is claiming is as provided for in its TOB and in line with what Mr E was given to expect when he instructed HRC. I think the TOB were clear that, if Mr E proceeded to full advice, he’d have to pay the fee for that, even if he decided against transferring or if he wanted to transfer despite advice to the contrary, in which case HRC would treat him as an insistent client and facilitate the transfer

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for him. That was stressed throughout the process and not just in the TOB. How much the advice would cost was also made clear to Mr E throughout. The documents I’ve seen and which I’ve mentioned above show that Mr E was told about the fee several times and it was made clear that it would be payable, even if he didn’t accept the advice. For example, in addition to the TOB, there’s HRC’s letter of 23 June 2022, the abridged advice summary, and the reports dated 12 and 25 July 2022. Mr E did tell HRC that he no longer wanted HRC to act for him. The investigator referred to what section 10.17 of the TOB said about termination of services (and which I’ve set out above). It provides for fees due to the date of termination on a pro-rata basis. But here Mr E told HRC that he didn’t want them to act for him anymore on 21 February 2023. I don’t think that was part way through the process – it was at the end. By then, as HRC has pointed out, the transfer value was already en route from the DB scheme to the new personal pension provider. The transfer was effectively complete and HRC had done all the work in connection with it. So I don’t think it’s the sort of situation where HRC should reduce its fee to reflect that only part of the work was actually undertaken. Mr E has queried the fee itself. As I’ve explained above, the CETV was uplifted to £159,633 and it’s on that amount that HRC’s advice fee has been calculated. The report dated 25 July 2022 says the fee is based on the transfer value at the time of the advice. By the time the advice was given in July 2022, the CETV of £197,285 was no longer valid – it had been issued on 28 November 2021 and was only guaranteed until 28 February 2022. So it wouldn’t be fair to use that CETV. But HRC hasn’t used it as the basis for its advice fee – instead it’s used the lower CETV that was actually applied. I think that’s in accordance with HRC’s TOB and in line with what Mr E was told and is fair and reasonable. The fees are on a scale/tiered basis, as set out in the TOB and repeated elsewhere, for example on page 13 of the report dated 12 July 2022. It’s 7% for the first £50,000 of the transfer value, 6% for £50,001 to £100,000 and 5% for the balance. The fee of £9,481, based on a CETV of £159,633, has been calculated correctly. All in all, I’m unable to say that Mr E shouldn’t have to pay HRC’s fee. HRC has confirmed that reasonable payment arrangements are something it would consider on monthly or annual terms. So I’d hope that some agreement can be reached. Finally, just to clear up a few other points, Mr E has mentioned that he’s requested call recordings. I understand HRC provided those in October 2025. He’s also said he didn’t receive an invoice from HRC until recently, more than three years after the event. I’m not sure why HRC didn’t request payment earlier. If it didn’t, I can understand that getting a demand would’ve come as an unpleasant surprise to Mr E. But I don’t think that impacts on HRC being able to claim payment – generally speaking, a creditor has six years to recover a debt. And, as far as I’m aware, HRC isn’t seeking interest on the amount owed. As to why the fee wasn’t deducted from Mr E’s pension fund, I think that was probably because HRC was no longer instructed when the transfer payment was actually made and after it had been resent by the DB scheme by which time Mr E was dealing with things himself. And, as I’ve mentioned above, there seems to have been some confusion at the end and in respect of which HRC did make a compensatory payment to Mr E. I do have sympathy for Mr E. I can understand that not getting as much by way of a transfer value as he was expecting has caused problems for him. And he clearly feels that HRC’s service was lacking. But as I’ve said, I’m unable to consider any complaint about how HRC processed the transfer, including if there was any delay on HRC’s part and which impacted

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on the CETV paid. In so far as Mr E’s complaint about HRC’s fees is concerned, for the reasons I’ve explained, I’m unable to uphold it and I can’t say that HRC isn’t entitled to recover its fee. My final decision I’m not upholding Mr E’s complaint and I’m not making any award. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr E to accept or reject my decision before 25 May 2026. Lesley Stead Ombudsman

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