Rowanmoor pension switch error cost clients £5K

Rowanmoor delayed a fund switch within a pension for almost a year, costing a group of clients more than £5,000, the Pensions Ombudsman (PO) has ruled.

In February 2008, members and trustees of the Hoyle and Dean pension plan, a small self-administered scheme (SSAS) were advised to move its investment in an Aviva property fund to a Defensive Managed fund run by the same provider.

The group's investment adviser, PM&M, sent a written instruction to Rowanmoor in March to arrange for Aviva to carry out the switch, but the instruction was not sent by Rowanmoor.

It was not until February 2009 that PM&M realised no switch had been made.

In the meantime, the property fund's value had fallen significantly and the pension plan had lost the equivalent of £5,363, the advisory firm claimed.

Rowanmoor sent instructions to Aviva to carry out the switch in February 2009, but said it believed the pension plan had only lost around £3,700.

The switch was finally carried out in June 2009.

PO Tony King ruled the complaint against Rowanmoor should be upheld because it failed to act on an investment instruction.

Rowanmoor suggested PM&M should be responsible for an element of contributory negligence for failing to spot the error earlier.

However, the Ombudsman said Rowanmoor could not shift the burden of responsibility onto PM&M.

He noted the error "came to light at a reasonable point" - when PM&M was preparing for a meeting with its clients.

King ruled Rowanmoor must pay each applicant member of the pension plan £100 compensation, and pay a set amount of units into the Aviva Defensive Managed fund to make up for the loss.