HBOS Investment Fund Managers Limited · DRN-6194430

The complaint Mr H complains that HBOS Investment Fund Managers Limited (HBOS) delayed a partial transfer of funds from his pension plan to another provider which caused him a financial loss. He says the reason HBOS gave for the delay wasn’t addressed when it did complete the transfer – so either HBOS didn’t require the information it requested, or it transferred his funds in breach of its own policy. He also complains about the lack of clear information HBOS provided around the funds he held which he says prevented him from making investment decisions at a time when the markets were falling dramatically. He says HBOS also incorrectly delayed a fund switch he’d requested in 2024. He would like compensation for any financial loss he has suffered because of the delays and poor administrative service, as well for the time he has spent trying to resolve the situation. What happened Mr H had been part of a Group Stakeholder Pension Plan since 2004. Following a letter Mr H wrote to HBOS on 1 December 2024 asking for a breakdown of his funds and the value of his pension plan, he then called HBOS to ask for a list of funds he could invest into – so that he could consider a fund switch. Two days later he was informed in a letter that it wasn’t possible to carry out the switch, but he later called HBOS again and it was confirmed to him that the letter was incorrect, and he could switch into those funds. So Mr H complained about the conflicting information. HBOS apologised for the incorrect information in its letter of 5 December 2024 and confirmed the switch had now gone ahead. It paid Mr H £100 for the trouble and upset caused. In February 2025 Mr H wanted to transfer part of his fund to a provider where he held another pension. He told HBOS which funds it should take the money from and that he had completed the relevant forms with the other provider. This request was then set up on the electronic transfer system on 7 March 2025. But the transfer wasn’t actioned because HBOS said it was waiting for evidence that Mr H had a financial adviser, so he complained. HBOS responded in May 2025 and agreed that it had provided a poor service. Subsequently the transfer completed on 5 June 2025 (Mr H says he wasn’t required to confirm if he had an adviser for the transfer to progress at this time) but HBOS said it would backdate the transfer date to 8 March 2025 to ensure Mr H didn’t suffer a financial loss because of the delay. It also paid further compensation. HBOS then revisited Mr H’s complaint and said it would: • Work with the other provider to calculate any investment loss Mr H suffered as a result of the transfer delay in respect of the investment choices he made with the provider. • Provide Mr H with the necessary assurance that his request of 3 December 2024 had been completed on the correct date and pay any additional investment loss that may have occurred separately to the other provider.

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• Pay Mr H a further £300 compensation for its poor service and avoidable transfer delays. Mr H said he had requested information from HBOS which would allow him to see what funds had been sold and remained before and after the transfer – and the unit price of those funds on the same day. As he hadn’t received this information in a form he could understand he brought his complaint to us where one of investigators looked into the matter. They initially said HBOS’ offer was fair and reasonable, but Mr H said he didn’t accept the offer because he wanted to know the financial value (benefit to him) of HBOS’ calculations regarding the delays. He also thought it may have drawn his partial transfer from across his entire fund holdings as opposed to the particular funds he asked it to use. In addition he thought HBOS’ delays meant he was unable to purchase the shares he wanted after the transfer because the falling markets meant he had to take a more “defensive” approach. The investigator looked further into the complaint and said that HBOS’ offer of redress was broadly in line with our approach but that it should make some adjustments. They said: • It was unlikely that Mr H’s switch request of 3 December 2024 would have been actioned on the same day so they thought it was more reasonable that it would have taken place within two working days. If a revised calculation found this date was more favourable to Mr H, then it should pay any difference to him. • There was insufficient evidence to show a clear link between the delays in the partial transfer to another provider and Mr H’s assertion that he would have purchased different shares/assets had the transfer completed when it should have done – so they couldn’t reasonably recommend a comparison using those shares for HBOS’ loss assessment. But overall HBOS’ method of calculating any loss Mr H had suffered because of the delay in the partial transfer was fair and reasonable in the circumstances. • But HBOS ought not to be relying on Mr H to obtain the information it needed to carry out the loss assessment, so it should contact the provider itself in this case. • HBOS should be able to provide some form of confirmation of the values of the units that were sold to Mr H and should do so. • But we wouldn’t expect HBOS to go beyond that request, so Mr H should be aware that it might not be reasonable to expect a breakdown of the unit values before and after the transfer. • They thought the total of £772 that was offered/paid to Mr H for the considerable distress and inconvenience he experienced was fair and reasonable in the circumstances. Mr H didn’t think we’d addressed the issue of whether HBOS had sold the correct funds prior to the transfer or whether it had disinvested from across his entire portfolio. He also asked what further evidence was required to confirm his intention to buy specific shares on completion of the partial transfer had it been actioned in a timely manner. The investigator said that HBOS hadn’t had a chance to respond to the complaint about which funds had been disinvested, so Mr H would need to raise that issue separately when the outstanding ‘unit’ information was eventually provided. They also said it was difficult to prove the consequential loss Mr H was claiming regarding the purchase of new shares. They said they needed to be totally satisfied that it was HBOS’ actions alone which led to a

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change in investment strategy and in this case, they weren’t sufficiently persuaded by the evidence Mr H had provided – which was that he had purchased the same shares in January 2025. HBOS accepted the investigator’s view, but Mr H remained unhappy. He said his original complaint was that HBOS didn’t execute his instruction properly so as it hadn’t provided him with the information he requested, he hasn’t been able to confirm, and then to potentially complain, whether it did execute those instructions correctly – so he thought that should be considered within the scope of his current complaint. He also disagreed with the investigator’s view around his potential investment choices post transfer. He said he’d opened a plan with a new provider in order to self-invest – which is why he requested the partial transfer to be made as cash. And he had demonstrated purchasing shares – specifically the ones he wanted us to use as a benchmark loss comparison – but had to change his investment strategy when the transfer did finally complete because of a significant fall in the market due to external factors. Mr H also wanted to know how he could escalate a complaint about HBOS’ general conduct regarding the matter. So as no resolution could be found the matter was referred to an ombudsman – and was passed to me to review. My provisional decision I issued a provisional decision on 18 February 2026 upholding Mr H’s complaint and setting out what HBOS needed to do. I made the following points in support of the decision: • It was clear HBOS had made an error when Mr H wanted to make a fund switch in December 2024. HBOS accepted this and said it would put Mr H back into the position he would now be had it not caused a delay. But I thought it should recalculate its loss assessment on the basis that the switch had been carried out two working days after Mr H’s instruction. If the calculation uncovered any further financial loss beyond that which had already been addressed, it should be paid into Mr H’s pension plan. • Similarly Mr H’s request for a partial transfer of funds in February 2025 took too long to complete. And HBOS hadn’t provided a robust explanation for the delay. But it had acknowledged that and offered to carry out a loss assessment to compare the current value of Mr H’s plan with the notional value had the transfer request been completed on 8 March 2025. But I noted that HBOS hadn’t been able to confirm whether the funds had been drawn from across the plan or in line with Mr H’s specific instructions from his letter of February 2025. I said that HBOS should confirm the position within its calculation and if it hadn’t carried out the instruction as requested it should rework Mr H’s plan to show the correct current position – supported by a simple statement of account. • But I wasn’t persuaded that Mr H would have purchased the shares he said he would have bought had the transfer completed when it should have done. I didn’t think there was sufficient direct evidence to show his intention to do this and therefore I didn’t think that HBOS should have to reimburse him for any investment loss he said he suffered from not buying the shares. • I noted that HBOS had either paid or offered a total of £772 for the trouble and upset its actions caused Mr H. I thought this amount was within the range of what I’d expect to see for the impact the matter had and therefore thought it was a fair and reasonable resolution to the question of compensation.

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HBOS accepted my provisional decision and said it would complete the remedial actions I’d set out. Mr H said he didn’t fully agree with my findings although he was keen to draw the matter to a close. But he made the following points and observations in response: • This matter had been ongoing for over a year, and he still hadn’t received the information he asked for. • He had now turned age 55 – and had recently been made redundant from his job – which meant it was more important than ever to address his pension provision and planning. He was currently unable to do this as he didn’t have an accurate picture of his retirement provision, which he thought was unacceptable. • He didn’t agree with my conclusion that fair compensation was simply to tell HBOS to put him back into the position he would now be in but for its errors. He thought that a company of the size of HBOS ought to be held to higher standards than that. • He thought that our inability to be able to get HBOS to provide us with the missing information – despite a further request – was evidence of his own frustrations with HBOS experienced over an extended period. And that particular matter of providing information still hadn’t been resolved. 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. And having reviewed Mr H’s further submissions, I see no reason to depart from my provisional findings. I can understand Mr H’s frustrations around the length of time he’s been trying to get a resolution to this matter and his desire to be able to “get on with making financial decisions” – so I hope this decision will provide the closure Mr H is looking for. I’ll set out my final reasoning below. The 2024 fund switch request In September 2024 Mr H says HBOS decided to close and replace some of its funds. He says this information was confusing and unclear and when he complained about it his complaint was upheld. Following that Mr H decided to switch some of his funds and submitted a request. But he was initially told that the funds he wanted to switch into weren’t available to him within his plan, although when he subsequently contacted HBOS he was told that information had been incorrect. The switch was then carried out – but had clearly been delayed. HBOS accepted it had delayed matters and said it would ensure Mr H didn’t suffer financially by backdating the switch to when he made the request. I think HBOS’ approach to this loss calculation was fair and reasonable, but I don’t think it was practical to suggest the switch should be backdated to the actual date Mr H made the request. I say that because I agree with the investigator that a reasonable expectation would have been for the request to have been completed within two working days. But I understand HBOS has now completed this loss assessment calculation and paid redress. So to ensure Mr H is returned to the position he ought to have been in, HBOS should also obtain a notional value of his pension on the basis that the funds should have been switched on 5 December 2024 and compare the current value of the pension with this notional value.

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It should compare that with the redress I’ve assumed it’s already paid and if there’s any shortfall it should make an additional payment to Mr H’s pension plan. But if there hasn’t been any further loss then no redress is payable. If I’m wrong in my assumption that redress has already been paid then HBOS should obtain a notional value of the pension plan on the basis that the funds should have been switched on 5 December 2024 and compare the current value of the pension with this notional value. If there has been a loss, this should be paid into Mr H’s plan. If there isn’t a loss, then no redress is payable. The 2025 partial transfer of funds Mr H says he also holds a pension plan with another provider and wanted to move some of his funds with HBOS to that provider in anticipation of decisions he may need to make approaching retirement. He’s now told us that a recent redundancy, and having reached age 55, has increased this requirement for flexibility and the possibility of making withdrawals. His transfer instruction letter of 17 February 2025 was clear in setting out the five funds he wished his money to be transferred from – totalling around £140,000. The request was then put onto the electronic transfer system by the other provider on 7 March 2025 so should have completed soon after this date. But it wasn’t and the transfer didn’t fully complete until 5 June 2025. HBOS hasn’t provided a clear, robust explanation for this delay except that it was awaiting details of Mr H’s financial adviser. However it did ultimately transfer the funds without this information (Mr H didn’t have an adviser) so it’s unclear why this delay occurred. But in any case, HBOS has accepted responsibility for this delay and agreed to work with Mr H’s other pension provider to ensure he would be returned to the position he ought now to be in without the delay. In principle I think HBOS’ approach to a redress calculation in this respect is fair and reasonable, but Mr H also raised the question of whether the instruction was carried out correctly – as when he received a valuation and breakdown of units held in June 2025 he was able to work out that HBOS may not have followed his specific instructions. Mr H says he’s been asking HBOS to set out his pre and post transfer position for some time and wanted us to confirm the situation. I said in my provisional decision that I thought Mr H had raised this issue in his original complaint – and that HBOS had addressed it in its final response – although it hadn’t provided the breakdown of information after the transfer that Mr H wanted. We asked HBOS to provide the information but it didn’t, so in setting out the redress methodology HBOS now needs to follow below, I’ve also included the remedial actions HBOS may need to take after confirming what funds were used for the disinvestment. Mr H’s claim for investment losses Mr H says that because of the delay in transferring his cash there was a fall in the financial markets which meant he adopted a more “defensive” approach when investing the money with his other provider. He said he invested into Gilts – which he hadn’t done previously, and this was a reaction to the turmoil in the markets. He says if the transfer had completed when it should have done, he would have invested into a specific company’s shares, which were the ones he purchased in January 2025. He thinks these previous purchases – and the fact that he transferred cash ready to invest – support his claim that he would have invested in those shares. He would like to be compensated for any investment losses caused by not being able to invest in those shares

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Mr H has provided evidence that he purchased those particular shares in January 2025. And a screenshot from his account in October 2025 would suggest he still held them at that time. So I don’t dispute Mr H owns those shares and is familiar with them. But I’m not persuaded that evidence demonstrates that he would have bought further shares in March 2025 – which is when his partial transfer ought to have completed and the funds were available to him. I don’t dispute that Mr H may have adopted his investment approach in June 2025 because of market conditions at the time, but there’s simply not enough evidence for me to be able to conclude he would have bought the shares he’s named if the funds were available earlier. In his complaint letter to us Mr H said, when explaining that he’d suffered a financial loss for the reasons set out above, “if they had treated my transfer promptly and circa £140,000 was moved and held as cash, when the markets crashed I would not have been impacted. I also could have moved funds around to protect the drop in USA funds.” I think this is a more likely representation of events at that time and supports the idea of a more credible position of remaining in cash to avoid the stock market turmoil rather than purchasing shares in a company. And I think investing in Gilts – as Mr H subsequently did – is probably more akin to a cash holding than shares. Furthermore in the absence of any direct evidence – such as a recommendation letter from an adviser, or correspondence between himself and the other provider – about his investment intentions in April 2025, it’s simply not possible to speculate about what Mr H may have done. Mr H has said that he can’t provide evidence of what he was thinking of doing and he didn’t have an adviser as he made investment choices himself. But, and I appreciate he has provided evidence to demonstrate that he had previously purchased the same shares he says he would have bought in March 2025, it wouldn’t be fair for me to say that HBOS needs to consider any investment loss against them as opposed to the investments he did eventually make. To support a claim for consequential investment losses is a high bar and I’m not satisfied the evidence Mr H has provided clearly supports his claim that he would more likely than not have purchased those particular shares. The compensation payments I don’t take lightly the impact this whole matter has had on Mr H. He’s told us about the lack of clear information from 2024, the delay and misinformation around his fund switch in late 2024, and the delay in partially transferring funds to his other plan in 2025. In that time he also says he’s simply not received the information he requested so that could check the transfer was completed in line with his instructions, and also more generally to understand the full picture of his retirement provision at a time when his recent circumstances dictate a need to be more proactive about his pension provision and funds. I’ve seen from his submission how this ongoing matter has caused him considerable frustration and stress as well as spending a lot of time and effort trying to put things right. And I can understand that, while I haven’t asked HBOS to reimburse him for any consequential investment losses he said he might have incurred, his expectations around completing these purchases may have been raised and potential opportunities potentially denied. I think, for the overall impact this had on Mr H, this warrants a compensatory award which reflects the considerable distress, upset and worry – and/or significant inconvenience and disruption that needed a lot of extra effort to sort out – that Mr H suffered. It should be

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remembered this impact has lasted for many months and Mr H says the matter continues not to be entirely resolved. We would usually consider an award of between £300 and £750 for this level of trouble an upset. But I note HBOS has either paid or offered a total of £772 for all the distress and inconvenience it caused Mr H. This is beyond the range of which I considered, so in the circumstances I’ve concluded that’s a fair and reasonable offer to resolve matters. I know Mr H feels that simply telling HBOS to put him back into the position he would now be in but for its errors and delays isn’t sufficient and that HBOS should be held to higher standards. But our role isn’t to punish a business for its mistakes, it’s to ensure that a consumer doesn’t suffer a financial loss where an error or delay has occurred to cause such a loss. And in this case, I think the compensation that’s been offered fairly takes into account the impact on Mr H and the trouble and upset he’s been caused. Mr H says this matter is ongoing and HBOS even failed to provide the outstanding information when we asked, which supports his claim that HBOS has, and continues to act unfairly. But what I’ve set out below should ensure Mr H is put back into the correct financial position and the calculation that’s required to do that should be supported by the information he’s previously requested. I hope this can give Mr H the closure he requires and enable him to make the important financial decisions he now wants to make. Putting things right In order to put Mr H back into the position he would now be had the transfer been carried out in a timely manner, HBOS should obtain the notional value of Mr H’s other pension had the partial payment been transferred on 8 March 2025 (the day after the other provider submitted a partial transfer request) and compare this with the current value of the pension. If Mr H has suffered a financial loss, then compensation is payable. If there isn’t a loss, then no redress is payable. But also HBOS should confirm whether it did draw the transferred funds in line with Mr H’s instruction letter of 17 February 2025 within the loss assessment calculation I’ve set out above. It should ensure it shows the position of Mr H’s existing plan at the time of the transfer setting out the disinvestments that were made. If this isn’t in line with Mr H’s original request, then HBOS will need to rework his plan to reflect its correct position had the cash been taken from the correct funds. It should then provide Mr H with a simple account statement setting out the current position after the reworking. In respect of the loss assessment the compensation amount should if possible be paid into Mr H’s other 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. If a payment into the pension isn’t possible or has protection or allowance implications, it should be paid directly to Mr H as a lump sum after making a notional reduction to allow for future income tax that would otherwise have been paid. If Mr H has remaining tax-free cash entitlement, 25% of the loss would be tax-free and 75% would have been taxed according to his likely income tax rate in retirement – presumed to be 20%. So making a notional reduction of 15% overall from the loss adequately reflects

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this. In addition HBOS should pay Mr H any of the outstanding £772 compensation that hasn’t already been paid. My final decision For the reasons that I’ve given I uphold Mr H’s complaint against HBOS Investment Fund Managers Limited. HBOS Investment Fund Managers Limited should pay redress and compensation as set out above and provide Mr H with the information that’s required as part of the calculation in a simple and clear form. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr H to accept or reject my decision before 7 April 2026. Keith Lawrence Ombudsman

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