An IFA has helped an ex-bank employee secure £80,000 in compensation from her former employer after its advisers switched her out of her final salary pension scheme and into one of its own products.
Darrell Monteith, director at IFA firm Universal Finance in Country Tyrone, Northern Ireland, discovered the mis-selling by Ulster bank advisers tied to Natwest when the client was referred to him by her accountant last year.
In what he labelled an example of "smash and grab advice", his client would have been left £80,000 poorer in her retirement if he had not intervened.
The woman, who had worked for and banked with Ulster for twenty years, retired in 1995 having accrued about £90,000 in the company's defined benefit final salary pension scheme.
Ulster's Natwest tied advisers then advised her to switch her money into a personal pension, the Natwest Growth Managed Pension fund, at a cost in up front charges of 8%.
Monteith said: "I asked her why she had transferred out of her final salary scheme and she said the branch advisers had repeatedly recommended she switch so eventually she did.
"I found out pretty quickly she had been poorly advised," said Monteith, who then helped the pensioner make a formal complaint at the bank.
A suitability report by the Natwest adviser found that to get a return comparable to her defined benefit scheme elsewhere, the woman needed to make 12% per annum on her investment.
"The 12% target was unrealistic," Monteith said. "But the adviser still put her into the Natwest Life Stock Market Managed fund, which had only been in existence two years before she went in and hadn't done well in that time."
Ulster bank's own investigation concluded the advice its staff gave Monteith's client was "incorrect". It paid her compensation eight months after her initial complaint, and 15 years after she was mis-sold the product.
The £80,000 returned to the client by Ulster is what was agreed to be the value of the benefits lost to her by switching out of her defined benefit scheme.
Monteith, who runs his County Tyrone firm with his wife Shirley, said: "The client was delighted. She hadn't known she had an issue.
"If she had just gone back to the Natwest to buy her annuity - which is actually what she wanted me to do when she first came to me - it would never have raised the issue.
"It is smash and grab advice. Banks don't care about the long term relationship."
Ulster bank did not respond to requests for comment.
What made financial headlines over the weekend?
Caring for children and elderly relatives
Similar to June 2007
Square Mile’s series of informal interviews
Fine reduced to £60,000