DP Pensions Limited · DRN-6264644

The complaint Miss G complains that the due diligence that DP Pensions Limited (“DP Pensions”) carried out when accepting her self-invested personal pension (“SIPP”) application and then the investment made was not sufficient. She says this has led to a financial loss. What happened Miss G has said that she was visited in her home and advised to open a SIPP with DP Pensions by a Mr G of PGP Wealth Solutions Ltd (“PGP”). She says she was advised by him to transfer her existing personal pension (“PPP”) into the SIPP, worth just under £15,000, and make an investment into an overseas property fractional ownership investment, the Rimondi Grand Resort & Spa (“Rimondi Grand”). At the time of the alleged advice PGP were an appointed representative (“AR”) of County Insurance Consultants Limited (“CIC”). Who were not regulated to provide this type of advice. A SIPP application was provided to DP Pensions in December 2010 signed by Miss G. There was no financial adviser noted within the SIPP application form. Under investment ‘other’ was selected and the intended investment was written as the Rimondi Grand. The SIPP was set up on 20 December 2010. An investment in the sum of £10,226.81 was made into Rimondi Grand on 22 February 2011. Rimondi Grand I understand the Rimondi Grand investment was an unregulated collective investment scheme offering investors the chance to purchase an interest in suites in a hotel resort development in Crete. The investment was marketed as a fractional ownership scheme, the owner’s interest being represented by rent for a fixed number of weeks. With the rental income being split between the management company and the owner. DP Pensions were noted within the marketing material as being the SIPP provider. Initially the rental income was guaranteed for a period of time. An extract has been provided about the Rimondi Grand investment by DP Pensions: "For the initial two-year period from the Resort opening, the Developer guarantees that you will receive a 6% net return each year. Following the rental guarantee period, you will receive 50% of the income generated for the weeks assigned to you. The remaining 50% of the income is retained by Resort Management Company for the marketing and servicing of the property and the Resort. Where the annual Net Rental Income received is lower than the average annual Net Rental Income for Owners of the Properties of the same type within the Resort, the Management Company shall subsidise the Owner's income to meet the average annual Net Rental Income for the Property type".

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Miss G’s SIPP received nine rental income payments from December 2011 to April 2014, the final payment was received in the SIPP on 8 April 2014. In July 2015 DP Pensions wrote to Miss G, they expressed concern about the lack of rental income from the investment. They explained that Miss G would be able to take legal action due to the agreement she had in place and asked her to let them know what she would like to do. Then in August 2015 DP Pensions forwarded a newsletter from the firm managing the investment, Paolo Management Services (Paolo) about the investment. This explained that as well as political and economic issues in Greece (where the resort was) there had been some technical issues with their payment systems. That they were manually working through payments for customers and apologised for the payment delays. In October 2015 DP Pensions say they received a subject access (SAR) request from a Claims Management Company (Firm M) acting on behalf of Miss G. Firm M is no longer trading and DP Pensions didn’t receive a complaint from them. In January 2016 DP Pensions wrote again to Miss G, they provided correspondence they had received from Paulo. It set out again an apology for the delay in rental income payments and: “We understand that some clients are unnecessarily concerned about the money they invested to purchase their property at the resort. It is important to remind everybody that the properties purchased from the developer of the resort are separate to the rental and management that we perform. The properties are what we call “immovable objects” and therefore the funds used to purchase them, are secured on those properties and the property remains yours to do as you wish.” I understand rental income never resumed. On 29 March 2019 Miss G, via her new CMC, Firm G, raised a complaint with DP Pensions, they received it on 1 April 2019. She said that DP Pensions had not carried out sufficient due diligence when accepting her SIPP application and the Rimondi Grand investment into her SIPP. She asked to be put back into the position she would have been in but for her application. DP Pensions provided their final response on 17 May 2019. They said that the complaint had been made out of time and this service could not consider it. Between the final response and the complaint being passed for an ombudsman to review it DP Pensions made a number of detailed submissions about this service’s jurisdiction. An investigator provided their view of Miss G’s complaint. They said it had been made in time. Because DP Pensions didn’t agree the complaint was passed to an ombudsman for consideration. I issued my jurisdiction decision, after careful consideration of all the submissions made, I concluded this complaint had been referred in time and therefore, this service had jurisdiction to consider it. DP Pensions submitted the following in relation to the merits of Miss G’s complaint: • DP Pensions were never informed by Miss G that she had received advice. No advisory fee was paid to PGP or any other firm. • Miss G was a direct customer. If she received advice, then this complaint should be directed at the advising firm. • Miss G has no documentary evidence of advice, it’s highly unlikely, had she been advised by PGP that it would have been verbally. And they would have asked for a fee to be paid for the work done as they had on other cases.

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• DP Pensions were not obligated to ask Miss G more than they did within the application form. And Miss G did not list an adviser on the application form. So, had they asked her it’s unlikely Miss G would have said she had an adviser. • DP Pensions were not obligated to or authorised to check the investment was suitable for Miss G. DP Pensions’ obligation was to check that the investment was genuine and capable of being held within a SIPP without any adverse tax consequences. • DP Pensions carried out reasonable due diligence on the investment by checking the Trustee and the management company on the regulator’s database and on companies house. • They were satisfied that they understood the investment, made sure it was genuine and not a scam, fraud, money laundering or pension liberation. • DP Pensions checked that the investment came about due to a reputable agreement and that the agreements were correctly drawn up. They checked that the investment could be independently valued. • The investment was not difficult to understand, and it has not failed. The property was built and is operational. It was not foreseeable that the management company would stop paying the rental income. It was a straightforward property investment. • Miss G was provided with two cancellation warnings prior to the investment being made which asked her to consider if she had been given personal advice. And to consider if she was satisfied that the investment was suitable. An investigator provided their assessment; they upheld Miss G’s complaint. In summary they said that DP Pensions had an obligation to conduct appropriate due diligence checks on the business they received. That DP Pensions had reason to question Miss G about her application because it was obvious she was a retail consumer and it was unlikely she would have knowledge of the investment being proposed without having received some advice or guidance. Had they questioned Miss G, DP Pensions would have discovered she had received advice by PGP. And DP Pensions, having carried out appropriate checks on them and their principle firm would have discovered that they were not regulated to provide this advice to Miss G about her pension, or the investment being made. The investigator said that DP Pensions ought to carry out a calculation to put Miss G back into the position she would have been in had they rejected her application. And award £300 compensation for the distress and inconvenience caused. Miss G agreed with the assessment, but DP Pensions didn’t, they provided some additional information and arguments: • DP Pensions received a total of 483 new customer applications in the period that they received 31 applications where consumers invested in Rimondi Grand. • There were 19 applications that were advised by three different advisers, six where DP Pensions paid a fee to either PGP or High Peak and six direct consumers, of which Miss G was one. • Miss G was the 21st consumer, DP Pensions had received a mix of advised and direct consumers by this point and so receiving a direct application wasn’t unusual. • Miss G’s memory of the events is not reliable and is limited. All the documented evidence points to her being a direct consumer. Had PGP been involved they would have requested a fee for their services. And if Miss G was told to make this investment by a friend it’s likely she did so directly. • There is no evidence that Miss G has attempted to sell the investment – even though DP Pensions say the investment can be transferred. And it doesn’t seem she has made any enquiries with the hotel about the lack of rental income.

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• This service has not addressed the above points or commented on the due diligence DP Pensions caried out on the Rimondi Grand investment, which they would like us to do. The investigator addressed some of these points, I won’t list them all here but to mention those I think are key to this complaint: • DP Pensions confirmed that two of the six customers introduced by PGP/High Peak were introduced to them by Mr G. • Miss G has said she was advised by Mr G. It’s usual in the case of an unregulated adviser for there to be no documentary evidence, for example a suitability report. And it’s unlikely Miss G would be able to name an adviser associated with a firm that is known to have advised other clients to open a DP Pensions SIPP and make this investment, without their involvement. • At the time of Miss G’s application, the individual was not authorised to act as an introducer and so it’s reasonable that they were not listed on the application form. • DP Pensions ought to have asked more questions when they received Miss G’s application. Had they done so they would have found that she had been advised by an unregulated adviser and should not have accepted her application. The complaint was passed for an ombudsman’s consideration. DP Pensions provided some additional comments, in summary: • Suggesting Miss G has consistently said she was advised by Mr G is inconsistent with previous assessments. Which said she was confused about the parties involved. • It is unusual for there to be no documentary evidence of Mr G’s involvement. In all other cases where Mr G or PGP/High Peak were involved a broker fee was paid. • Mr G continued to direct PGP after they lost permissions in April 2010 and operate as an unregulated introducer and continued to charge fees. • The FCA have never required SIPP providers to ask consumers why they have not taken advice or whether it was from a regulated or non-regulated person. • It is possible that the friend Miss G suggested told her about the investment was advised by Mr G, but for whatever reason she decided not to use him. This is more likely than PGP/High Peak working for no fee. I issued my provisional decision, the reasoning of which forms part of this final decision. I said: “DP Pensions have continued to comment on this service’s jurisdiction, following my jurisdiction decision. I have considered the arguments put forward, none of which amounts to new evidence, I have not seen anything that changes my position and so, for the reasons set out within my jurisdiction decision, this service has jurisdiction to consider this complaint. I will go on to address the merits below. I’ve considered all the submissions made by the parties. However, I trust that they won’t take the fact that my decision focuses on what I consider to be the central issues as a discourtesy. The purpose of this decision is not to comment on every individual point or question the parties have made, rather it is to set out my findings and reasons for reaching them. Having carefully considered all the evidence I am upholding Miss G’s complaint. I will go on to explain why below. Relevant considerations

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When considering what’s fair and reasonable in the circumstances, I need to take account of relevant law and regulations, Regulator’s rules, guidance and standards and codes of practice, and what I consider to have been good industry practice at the time. Where the evidence is incomplete, inconclusive or contradictory, I reach my conclusions on the balance of probabilities – that is, what I think is more likely than not to have happened based on the available evidence and the wider surrounding circumstances. I have taken a number of considerations into account: • The Financial Services and Markets Act 2000 (“FSMA”). • Court decisions relating to SIPP operators, in particular Options UK Personal Pensions LLP v Financial Ombudsman Service Limited [2024] EWCA Civ 541 (“Options”) and the case law referred to in it including: o Adams v Options UK Personal Pensions LLP [2021] EWCA Civ 474 (“Adams”) o R (Berkeley Burke SIPP Administration) v Financial Ombudsman Service [2018] EWHC 2878 (“Berkeley Burke”) o Adams v Options SIPP UK LLP [2020] EWHC 1229 (Ch) (“Adams – High Court”) • The Financial Services Authority (FSA) and FCA rules including the following: o PRIN Principles for Business o COBS Conduct of Business Sourcebook o DISP Dispute Resolution Complaints • Various regulatory publications relating to, or relevant to, SIPP operators and good industry practice. The regulatory publications and good industry practice: The regulator issued a number of publications which reminded SIPP operators of their obligations, and which set out how they might achieve the outcomes envisaged by the Principles, namely: The 2009 and 2012 Thematic Review Reports. The October 2013 finalised SIPP operator guidance. The July 2014 “Dear CEO” letter. The 2009 Report included: “We are very clear that SIPP operators, regardless of whether they provide advice, are bound by Principle 6 of the Principles for Businesses (‘a firm must pay due regard to the interests of its clients and treat them fairly’) insofar as they are obliged to ensure the fair treatment of their customers…. We encountered a relatively widespread view among small SIPP operators that they bear little or no responsibility for the quality of the SIPP business that they administer, as this is the responsibility of the clients’ advisers. As a result, some SIPP operators have not been taking basic measures such as checking, on an ongoing basis, that advisers who introduce clients to them are FSA authorised and have appropriate permissions… We agree that firms acting purely as SIPP operators are not responsible for the SIPP advice given by third parties such as IFAs. However, we are also clear that SIPP operators cannot absolve themselves of any responsibility,

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and we would expect them to have procedures and controls, and to be gathering and analysing management information, enabling them to identify possible instances of financial crime and consumer detriment such as unsuitable SIPPs. Such instances could then be addressed in an appropriate way, for example by contacting the members to confirm the position, or by contacting the firm giving advice and asking for clarification. Moreover, while they are not responsible for the advice, there is a reputational risk to SIPP operators who facilitate SIPPs that are unsuited or detrimental to clients. Of particular concern were firms whose systems and controls were weak and inadequate to the extent that they had not identified obvious potential instances of poor advice and/or potential financial crime. The following are examples of measures that SIPP operators could consider, taken from examples of good practice that we observed and suggestions we have made to firms: • Confirming, both initially and on an ongoing basis, that intermediaries that advise clients are authorised and regulated by the FSA, that they have the appropriate permissions to give the advice they are providing to the firm’s clients, and that they do not appear on the FSA website listing warning notices. • Having Terms of Business agreements governing relationships, and clarifying respective responsibilities, with intermediaries introducing SIPP business. • Routinely recording and reviewing the type (i.e. the nature of the SIPP investment) and size of investments recommended by intermediaries that give advice and introduce clients to the firm, so that potentially unsuitable SIPPs can be identified. • Being able to identify anomalous investments, e.g. unusually small or large transactions or more ‘esoteric’ investments such as unquoted shares, together with the intermediary that introduced the business. This would enable the firm to seek appropriate clarification, e.g. from the client or their adviser, if it is concerned about the suitability of what was recommended. • Requesting copies of the suitability reports provided to clients by the intermediary giving advice. While SIPP operators are not responsible for advice, having this information would enhance the firm’s understanding of its clients, making the facilitation of unsuitable SIPPs less likely. • Routinely identifying instances of execution-only clients who have signed disclaimers taking responsibility for their investment decisions, and gathering and analysing data regarding the aggregate volume of such business. • Identifying instances of clients waiving their cancellation rights, and the reasons for this.” The 2009 and 2012 Thematic Review Reports and the “Dear CEO” letter are not formal guidance (whereas the 2013 finalised guidance is). However, all of the publications provide a reminder that the Principles for Businesses apply and are an indication of the kinds of things a SIPP operator might do to ensure it is treating its customers fairly and produce the outcomes envisaged by the Principles. They did not introduce new rules or requirements. They therefore have relevance in a case such

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as this one where the events complained about occurred before some of the publications were issued. The publications setting out the regulators’ expectations of what SIPP operators should be doing also go some way to indicate what I consider amounts to good industry practice. I am therefore satisfied it is appropriate to take them into account. What did DP Pensions’ obligations mean in practice? I am satisfied that to meet its regulatory obligations when conducting its operation of SIPP business, DP Pensions had to decide whether to accept or reject SIPP applications and/or particular investments with the Principles in mind. I say this based on the overarching nature of the Principles (as is clear from the case law) and based on good industry practice. I am satisfied that a non-advisory SIPP operator could decide not to accept a SIPP application or a request to make an investment without giving advice. And I am satisfied that in practice many non-advisory SIPP operators did refuse to accept business and/or refuse to make certain investments without giving advice. It is my view that a non-advisory SIPP operator should have due diligence processes in place to check the applications it receives, and to check the investments they are asked to make on behalf of members or potential members. And DP Pensions should have used the knowledge they gained from their due diligence checks to decide whether to accept or reject an application or make a particular investment. DP Pension’s position in broad terms: In broad terms, DP Pension’s position is: • Miss G was a direct client. There is no evidence that she received advice and her testimony is not reliable. • PGP/High Peak always charged a broker fee when involved in a transaction. • They carried out sufficient due diligence checks on the Rimondi Grand investment that was made. DP Pensions have sought to argue that the Rimondi Grand investment was a simple property investment that was easy to understand. But, having had sight of the investment due diligence carried out, I disagree. Miss G’s SIPP didn’t make a direct property purchase with a view to simply collect rent. The Rimondi Grand investment was a collective investment scheme, whereby Miss G’s SIPP would own set weeks of the year with funds pooled and distributed to owners by a Trustee that held the property on behalf of many owners. It was a high-risk esoteric investment that is not suitable for most consumers. At the time of the application Miss G was around 40 years of age, her occupation was recorded and not linked to finance or pensions, or investing. She indicated within the SIPP application that she would be transferring a total of around £14,000 and investing the full amount into a commercial fractional property investment. I’ve seen nothing to suggest she was anything but a retail consumer. I think DP Pensions ought to have identified Miss G’s application of business as having the possibility for consumer detriment. I say that because it contained several anomalous features as described by the regulator in their 2009 Thematic Report:

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- She was transferring a relatively small sum into the SIPP, which is unusual for several reasons. For example, fees for the administration of a SIPP are usually higher than that of a personal pension. - Almost all the pension monies were being invested into a high risk and esoteric investment which is not usually suitable for retail consumers. - Miss G was a retail consumer who appeared to be carrying out the above with no regulated advice. It is for this reason that I think it would have been reasonable for DP Pensions to take pause on receipt of Miss G’s application. DP Pensions have said that they had already received some direct applications from consumer’s who made the same investment, and so Miss G’s business wasn’t anomalous to them. I can’t comment on the other applications DP Pensions received, however receipt of other applications that had the same warning signs of consumer detriment doesn’t make Miss G’s application any less concerning. DP Pensions ought to have made further enquiries with Miss G, as suggested by the Regulator within their Thematic Review. Miss G has told this service that she was advised by Mr G of PGP to transfer her pension into a DP Pension SIPP and make the investment that she did. I think it’s most likely that Miss G’s account of the events is accurate. I say that because it’s unlikely that a retail consumer would decide without any outside input to carry out the transaction that she did. And, she named an adviser that did act for PGP who was introducing consumers to DP Pensions at the time. DP Pensions have said that a broker fee was always paid by them where PGP was involved, and it’s not likely that they would work for free. Suggesting that PGP would always provide the form to request a broker fee is to rely on them acting in a way that was efficient and consistent. When PGP were doing things they shouldn’t have been doing, I don’t think that’s reasonable. Or reason enough for me to be persuaded, based on the wider circumstances, that PGP did not advise Miss G. I appreciate DP Pensions’ comments about Miss G’s confusion about the parties involved in the transaction. As she did think at one point that Mr G was working for DP Pensions. But, this just demonstrates how complicated Miss G found this arrangement. Which further persuades me that she would not have carried things out on her own volition. Miss G may not have fully understood who Mr G worked for, however she says he advised her to carry out this transaction. And, had DP Pensions asked Miss G at the time of the application some questions about how the application came about I think it most likely she would have told them about Mr G and PGP’s involvement. And so, acting reasonably DP Pensions would have known about PGP’s involvement in the transaction. DP Pensions have explained on other complaints this service has received that they wouldn’t have accepted business from PGP prior to carrying out due diligence on them to establish they were FCA regulated, had the appropriate permissions and were providing Miss G with financial advice. Had DP Pensions checked the FCA register they would have seen that PGP didn’t have the correct permissions to provide Miss G with the advice she received at the time. And so, DP Pensions wouldn’t have accepted business introduced by PGP. Therefore, DP Pensions would have concluded that they would not accept Miss G’s business and let her know that.

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I’ve thought about what Miss G may have done had DP Pensions refused her business. Miss G may have sought advice from another advisory firm, but I think it’s very unlikely that an FCA regulated adviser would have provided her with positive advice to carry out this transaction. I say that because she was transferring a small amount into a SIPP which likely had higher fees, to make a high risk investment with almost her full pension fund. I think it’s most likely Miss G would have thought about what DP Pensions had to say about not accepting her business – and most likely left her pension where it was. Other considerations DP Pensions have asked this service to consider the due diligence they carried out on the Rimondi Grand investment. Whilst I haven’t needed to provide my comments on whether the due diligence carried out was suitable, because DP Pensions shouldn’t have accepted Miss G’s business and therefore she would never have been in a position to make the investment. I did review the evidence provided to this service and thank DP Pensions for the submissions, which were used to establish the type of investment made. DP Pensions have also pointed out that Miss G received cancellation letters from them – which set out she could cancel the transaction. However, had DP Pensions carried out sufficient due diligence on the application Miss G would never have been in the position to receive these letters. That’s because DP Pensions should have refused to accept the application. In addition, DP Pensions have said that they’ve not seen any evidence Miss G has attempted to sell the investment. I understand from DP Pensions that the current Trustees have said the investment is transferrable. I’ve thought about whether there has been an opportunity for Miss G to mitigate her loss, but I don’t think so. Miss G is only required to take reasonable steps to mitigate things. Selling the investment is not a straightforward matter and I consider she has acted reasonably by bringing her complaint in an attempt to resolve things. In all the circumstances I consider it fair and reasonable for DP Pensions to compensate Miss G for her losses in full. And, in return, if they wish they can take ownership of the investment and sell it.” Miss G accepted the provisional decision, but DP Pensions didn’t they responded, in summary: • The 2009 Thematic Review of SIPP operators was not formal guidance. • The Rimondi Grand investment is not a failed investment, it is operating as expected. The rental income has not been paid due to the hotel management deciding not to pay it. DP Pensions couldn’t have known this would occur. It’s not fair or reasonable to expect DP Pensions to have rejected Miss G’s application on the possibility of this occurring. DP Pensions point to a published decision they say does not hold SIPP providers responsible for the future failure of an investment. • They reiterated that the investment was not complicated for a retail investor to understand. And don’t accept that Miss G’s inconsistent recollection about who provided her with advice indicates a lack of understanding. • Miss G’s assertion that she received advice from Mr G of PGP is unsupported by evidence. • No broker fee was paid to PGP for the alleged advice. This is a fundamental difference than another complaint with the same set of circumstances. • Request of payment of the broker fee wouldn’t merely be efficiency on their part – but the purpose of them providing advice. In all of the other 6 instances where PGP

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provided advice a broker fee was paid. It’s more likely that a broker fee was not requested – because no advice was given to Miss G. • If PGP were seeking to conceal their involvement, then had DP Pensions asked Miss G some questions she would have been told by PGP to conceal their involvement. • DP Pensions aren’t required to ask consumers why they have not taken advice or whether it was from a regulated or non-regulated person. And there was no suggestion of consumer detriment. • DP Pensions obligations were limited to considering if an investment fell within the list permitted by HMRC or could give rise to a tax charge. • It’s not fair or reasonable to conclude that Miss G received advice from Mr G or PGP – when it’s only a mere possibility. It’s possible that Miss G first encountered Mr G when engaging a CMC in 2015. DP Pensions had an administrator with the same first name as Mr G which may explain her confusion. • It is not known how Miss G came to make this transaction – this service have assumed it was with external input. Many of the consumers that invested into Rimondi Grand lived near Miss G. She may have known others who made the same investment. • Miss G’s memory can’t be relied upon. • They said that their argument in relation to other introductions they received had been misunderstood and so clarified they meant that there was nothing unusual about a direct client making an application to open a SIPP that would invest in Rimondi Grand – not that because other consumers invested in the Rimondi Grand investment by way of direct instruction means it must have been fine. • It is not unreasonable for Miss G to have instructed the sale of the investment. 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. Whilst I have considered everything that has been provided to this service, I don’t intend on commenting on each item. Instead, I will focus on what I have determined are the key aspects of the complaint. When considering what’s fair and reasonable in the circumstances, I need to take account of relevant law and regulations, Regulator’s rules, guidance and standards and codes of practice, and what I consider to have been good industry practice at the time. This includes the Principles for Businesses (‘PRIN’) and the Conduct of Business Sourcebook (‘COBS’). And where the evidence is incomplete, inconclusive or contradictory, I reach my conclusions on the balance of probabilities – that is, what I think is more likely than not to have happened based on the available evidence and the wider surrounding circumstances. Having done so I am upholding Miss G’s complaint largely for the same reasons as set out within my provisional decision, which forms part of this final decision. Rather than repeating all of the explanations given again in full I have concentrated on the additional points DP Pensions have made following it. DP Pensions refer to the investment and explain it has not completely failed – that the complex is operational. I haven’t needed to consider the due diligence carried out on the investment. That’s because I have concluded that DP Pensions, acting fairly and reasonably, should not have accepted Miss G’s application. And so, I have not needed to consider whether they ought to have accepted the investment Miss G intended on making.

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Whether or not the investment has now failed has no bearing on my reasoning for upholding Miss G’s complaint. I agree the 2009 Thematic Review Report was not formal guidance. However, the publication provided a reminder that the Principles for Businesses apply and provided an indication of the kinds of things a SIPP operator might do to ensure it is treating its customers fairly and produce the outcomes envisaged by the Principles. It therefore has relevance in a case such as this one. The investment was an unregulated collective investment scheme. It is high risk, esoteric and not suitable for most consumers. That is not to suggest that DP Pensions ought to have considered if the investment was suitable for Miss G by considering her personal circumstances. However, it was not a standard investment and ought to have been an indicator to DP Pensions that there was the chance of consumer detriment when paired with other risk factors, such as Miss G transferring a small amount into a SIPP and investing all of the monies into one high-risk investment. Which she appeared to be doing with no regulated advice. DP Pensions have said there was nothing unusual about a direct consumer making an application to open a SIPP that would invest in Rimondi Grand. Because they had received other direct consumer applications. As I set out within my provisional decision – just because DP Pensions had received other, similar, applications doesn’t mean Miss G’s application contained less risk factors as identified above. With the information DP Pensions had about Miss G’s application they ought to have carried out further checks prior to accepting it. When referring this complaint Miss G explained that she had been advised to open a DP Pensions SIPP and make the investment that she did by PGP. And, when spoken to she named the adviser as Mr G of PGP. I appreciate there is no documentary evidence that Mr G or PGP gave advice to Miss G. But that doesn’t mean they didn’t. I have considered what is most likely on the balance of probabilities based on everything I have been told and provided with. It would be a very lucky guess for Miss G to be able to name, first and last, an adviser who was giving advice to consumers to carryout the same transaction that she did. DP Pensions have said that Miss G may have known others who had been advised by Mr G and recollections over time may change. However, Miss G told this service that she had been advised by PGP before she could have understood the implication that information may have on the outcome of her complaint. So, I can’t agree this was information Miss G added later. The lack of a broker fee on its own does not persuade me that PGP were not involved. For the reasons I set out within my provisional decision. DP Pensions have argued that they received a broker fee request from all of PGP’s introductions. However, my understanding based on this complaint is that DP Pensions did not ask direct introductions how their application came about. Without asking Miss G how this arrangement came about, DP Pensions treated her as a direct consumer. DP Pensions have also said that, even if they had spoken to Miss G – if PGP were attempting to conceal their involvement in her transfer, she would have been told not to mention them. As DP Pensions have set out – PGP did get paid a broker fee on several introductions they received. So, DP Pensions were aware of their involvement in similar transactions. So, I don’t think it likely that PGP were going out of their way to conceal their involvement to the point of asking Miss G to lie if asked. And it would be a leap for me to agree that Miss G would have withheld the truth had she been asked at the time how this

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transaction came about by DP Pensions. I am therefore satisfied that it’s most likely that Mr G and PGP were involved in the transaction Miss G has complained about. And that had she been asked she would have told DP Pensions about their involvement. DP Pensions have pointed to another decision that was issued. Whilst each decision is considered based on the specific merits and circumstances of each individual complaint, I reviewed this decision. I note that there are distinct, material differences between the complaint referred to and Miss G’s complaint. For example, a commitment to make the investment had been made prior to the SIPP being opened in the complaint that decision was about. Summary DP Pensions ought to have been concerned there was a chance of consumer detriment when they received Miss G’s SIPP application. And they should have carried out some more checks – such as speaking to Miss G and asking her how she had come to carryout the transaction. Had they done so she would most likely have told them she had been advised by PGP. DP Pensions have explained that they would not have accepted business from PGP without establishing that they had the required permissions to provide consumers with advice. And so, upon reviewing PGP’s regulatory permissions at the time of Miss G’s application DP Pensions would have found that they were not permitted to provide the advice that they had. And so, Miss G’s application ought to have been refused by DP Pensions. Had DP Pensions refused Miss G’s application I think it’s most likely she would have left her pension monies where they were. And I think Miss G has acted reasonably by bringing this complaint to resolve things. As such, it’s fair and reasonable for DP Pensions to carryout a redress calculation which puts Miss G back into the position she would now be in, but for their acceptance of her SIPP application. Putting things right In assessing what would be fair compensation, my aim is to put Miss G as close as possible to the position she would probably now be in if she hadn’t switched her pension into a SIPP and made the investment she did. I think Miss G would have remained with her previous provider, so I am satisfied what I have set out below is fair and reasonable. DP Pensions must: • Obtain the notional transfer value of Miss G’s previous pension plan, as at the date of my final decision. • Obtain the actual transfer value of Miss G’s SIPP, including any outstanding charges as at the date of my final decision. • Pay a commercial value to buy the investment (or treat it as having a zero value). • Pay an amount into Miss G’s SIPP to increase the transfer value to equal the notional value established. This payment should take account of any available tax relief and the effect of charges. • If the SIPP needs to be kept open only because of the investment and is used only to hold that asset, then any future SIPP fees should be waived until the SIPP can be closed. • Pay to Miss G an amount £300 to compensate her for the distress and inconvenience she’s been caused. • I’ve set out how DP Pensions should go about calculating compensation in more detail below.

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Treatment of the illiquid assets held within the SIPP I think it would be best if the investment held could be removed from the SIPP. Miss G would then be able to close the SIPP, if she wishes. That would then allow her to stop paying the fees for the SIPP. The valuation of the investment may prove difficult. For calculating compensation, DP Pensions should establish an amount they’re willing to accept for the investment as a commercial value. They should then pay the sum agreed plus any costs and take ownership of the investment. If DP Pensions can purchase the investment then the price paid to purchase the holding will be allowed for in the current transfer value (because it will have been paid into the SIPP to secure the holding). If DP Pensions is unable, or if there are any difficulties in buying Miss G's investment, they should give the holding a nil value for the purposes of calculating compensation. In this instance DP Pensions may ask Miss G to provide an undertaking to account to them for the net amount of any payment the SIPP may receive from the relevant holding. That undertaking should allow for the effect of any tax and charges on the amount Miss G may receive from the investment and any eventual sums she would be able to access from the SIPP. DP Pensions will have to meet the cost of drawing up any such undertaking. Calculate the loss Miss G has suffered as a result of making the transfer DP Pensions should first contact the provider of the plan which was transferred into the SIPP and ask them to provide a notional value for the policy as at the date of my final decision. For the purposes of the notional calculation the provider should be told to assume no monies would’ve been transferred away from the plan, and the monies in the policy would’ve remained invested in an identical manner to that which existed prior to the actual transfer. Any contributions or withdrawals Miss G has made will need to be taken into account whether the notional value is established by the ceding provider or calculated as set out below. Any withdrawal out of the SIPP should be deducted at the point it was actually paid so it ceases to accrue any return in the calculation from that point on. The same applies for any contributions made, these should be added to the notional calculation from the date they were actually paid, so any growth they would’ve enjoyed is allowed for. If there are any difficulties in obtaining a notional valuation from the previous provider, then DP Pensions should instead arrive at a notional valuation by assuming the monies would have enjoyed a return in line with the FTSE UK Private Investors Income Total Return Index. That is a reasonable proxy for the type of return that could have been achieved over the period in question. The notional value of Miss G’s existing plan if monies hadn’t been transferred (established in line with the above) less the current value of the SIPP (as at date of my final decision) is Miss G’s loss. Pay an amount into Miss G’s SIPP so that the transfer value is increased by the loss calculated above. If the redress calculation demonstrates a loss, the compensation should if possible be paid into Miss G’s pension plan. The payment should allow for the effect of charges and any available tax relief. The compensation shouldn’t be paid into the pension plan if it would conflict with any existing protection or allowance.

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If a payment into the pension isn’t possible or has protection or allowance implications, it should be paid directly to Miss G as a lump sum after making a notional deduction to allow for income tax that would otherwise have been paid. 25% of the loss could have been taken as tax-free cash and 75% would have been taxed according to her likely income tax rate in retirement – 20%. So, making a notional deduction of 15% overall from the loss adequately reflects this. SIPP fees If the investment can’t be removed from the SIPP, and because of this it can’t be closed after compensation has been paid, then it wouldn’t be fair for Miss G to have to continue to pay annual SIPP fees to keep the SIPP open. So, if the SIPP needs to be kept open only because of the illiquid investment and is used only or substantially to hold that asset, then any future SIPP fees should be waived until the SIPP can be closed. Interest The compensation resulting from this loss assessment must be paid to Miss G or into her SIPP within 28 days of the date DP Pensions receives notification of her acceptance of my final decision. The calculation should be carried out as at the date of my final decision. Interest must be added to the compensation amount at the rate of 8% per year simple from the date of receipt of acceptance of my final decision to the date of settlement if the compensation is not paid within 28 days. Distress & inconvenience I think the loss of the pension provision that is the subject of this complaint caused Miss G significant distress, and DP Pensions should pay her £300 to compensate her for this. My final decision I uphold Miss G’s complaint and direct DP Pensions Limited to pay compensation as set out above. Under the rules of the Financial Ombudsman Service, I’m required to ask Miss G to accept or reject my decision before 28 April 2026. Cassie Lauder Ombudsman

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