Two numbers, same firm, same client, months apart: £201, then £29,953.
The first was a redress offer made under True Potential’s own compensation scheme. The second came after the client turned that offer down and complained instead. The gap between them raises a fair question for anyone holding a similar letter: what is the right way to work out what you lost?
What the review is about
In April last year, True Potential disclosed that the FCA had ordered a skilled person review, known as a section 166 review, into its non-advised “direct offers”.
Under those direct offers, clients filled in an online questionnaire and then transferred their investments into True Potential’s own portfolios, platform and advice service. The IFA who introduced them was paid 8% of whatever assets moved.
The scale is significant. The firm is now looking back at thousands of customers moved across between 2018 and 2024, including some advised transfers as well as direct offers. Its client numbers grew from around 200,000 in 2018 to 566,000 in 2024, much of that driven by direct offers. It initially put £95.5m aside to cover the cost.
Its 2024 accounts put the finding plainly enough: clients whose investments were not appropriately transferred into the group because of payments made to advisers. Clients have since been sorted into groups according to how risky their transfer looks, and where suitability has not been flagged as a risk, some will receive nothing at all.
How the £201 was reached
In April, the client was told he formed part of the review. True Potential said some of its onboarding in that period “fell below our high standards of customer care”, and that some customers may not have been fully informed about their choices when transferring.
His offer was £201. It was worked out by comparing his True Potential portfolio against the Asset Risk Consultants (ARC) Private Client Indices. That is a benchmark built from discretionary fund managers’ performance, after fees.
How the same client ended up with £29,953
He did not accept. He complained, through a claims management company which is the same route we handle for clients at Claim My Loss.
His transfer had been an advised one rather than a direct offer, and at the end of June True Potential partially upheld the complaint: his adviser had not made the suitability report visible in his online documents, so he would not have seen it before the transfer went through.
This time the sum was calculated differently. Instead of the ARC benchmark, True Potential asked his previous provider, Prudential, for a notional transfer value, meaning what his money would have been worth had he simply stayed where he was. The difference between that and his True Potential portfolio came to £29,953.
Two points of fairness. He began his complaint shortly before the £201 offer arrived, so the firm may have had new information by the time it reached the second figure. And he had moved from the higher-risk PruFund Growth into a True Potential balanced portfolio, which explains part of the gap.
True Potential says the redress review is now complete and all affected clients notified. It says it is confident in its methodology and benchmark, that both were developed after extensive consultation and applied consistently, and that in this case the additional compensation related to a separate matter rather than the redress scheme itself.
The benchmark question
This is the part that matters if an offer letter has landed on your doormat.
For the wider review, True Potential is not comparing what clients have now with what they gave up. It is measuring their portfolios against the ARC benchmark, uplifted from the median to roughly the 25th best portfolio in 100.
Its Growth-Aligned range, which holds the biggest share of the group’s assets at £8.9bn in June, has beaten that benchmark over three and five years. The Aggressive portfolio returned 44.9% over the five years to the end of March, against 31.1% for ARC. Where the portfolio has outperformed the benchmark, the redress shrinks towards nothing. That is how an offer of £201 happens.
Set that against the FTSE Private Investor Index, a multi-asset index the Financial Ombudsman Service accepted as an appropriate comparator in an upheld complaint against True Potential in June, where the ceding scheme could not supply a notional transfer value. Over five years that index returned 66.2%, against the Aggressive portfolio’s 44.9%. Same client, same transfer, a very different cheque.
The criticism of ARC is straightforward: it tracks bespoke discretionary management, net of fees, which is not what someone sitting in an off-the-shelf model portfolio actually has.
James Daley of Fairer Finance said he can see the logic in a generic calculation given the number of files involved, but warned that a scheme which is not generous enough will simply push clients towards the Ombudsman and the courts, dragging the episode out and costing more in the end.
Read the offer before you accept it
An offer is not a finding of what you lost. It is one firm’s calculation, using one benchmark, applied across thousands of people at once. Accepting it usually closes the matter for good.
If you were moved into True Potential between 2018 and 2024, whether on advice or through a direct offer, it is worth checking that figure against what you would have had if you had stayed put. That is the comparison the Ombudsman reaches for first, and as this case shows, it can produce a very different answer.
You do not need a claims firm to complain, and we will tell you honestly when you are better off doing it yourself. But where the sums are large or the paperwork has gone missing, pension transfer claims like these are what we deal with every day.
If you have received a redress offer from True Potential and you are not sure it reflects what you actually lost, speak to us before you accept it.
The first conversation is free with no obligation, and if we take your claim on we work on a no win, no fee basis. Call 0800 041 8359 or make an enquiry.
Based on reporting by Citywire New Model Adviser.
