Two Hornbuckle Mitchell clients say they have been left in an “awkward position” after the self-invested pension provider removed their adviser’s agency and refused to have any contact after a string of complaints over service levels.
Hayley North, a chartered financial planner for Rose and North, had her agency removed and the Sipp provider is refusing to deal with her “in any form”. Hornbuckle has told the clients that all their communications will be direct to them.
In a letter to the clients, seen by FTAdviser, Hornbuckle says: “It is clear Hayley is very frustrated with the service she is receiving from us. Following a full review of the file, it is clear we are not going to agree with your financial adviser, Hayley North, on the way we operate our business.
“It is with regret we will be terminating our business relationship with Rose & North. You may choose to have a business relationship with Rose & North, however we will not correspond with Rose & North in any form. All our communications will be directed to you.”
In the same letter, dated 20 March, Hornbuckle rejects complaints Ms North has raised regarding a spate of alleged delays, including when making income payments, processing regular withdrawals, assigning a VAT liability, and making fee payments to Ms North. It also rejected complaints over its “general level of service”.
In a letter to Hornbuckle chief executive Phil Smith, also seen by FTAdviser, the couple state that they “remain uncomfortable” with the service they are receiving and the “awkward position” Hornbuckle has put them in.
One option would be simply to leave the provider, but between them the clients would face exit fees totalling £2,390 plus VAT, of which £1,600 relates to the transfer of two commercial properties. The couple say in their letter Hornbuckle is “creating unreasonable barriers to leaving”.
An investigation by FTAdviser previously revealed Hornbuckle has among the highest fixed fees for commercial property transfers out of the Sipp of £800 per property. This compares to £250 with Liberty Sipp, £328 with LV and £400 with AJ Bell.
Hornbuckle Mitchell declined to comment on the specific allegations but a spokesperson did say: “We operate our business with TCF principles at the centre of everything we do.
“We continuously review our relationships with advisers and take appropriate action where required. We will not comment on specific cases or circumstances.
Philippa Hann, a partner in the financial services litigation team at Clarke Willmott, said she felt Hornbuckle would not be in breach of regulatory requirements.
She said: “It seems to me that the client has the option to retain Rose & North as her adviser but no instructions will be accepted by [Hornbuckle] from them.
“This means that whilst Rose & North can still advise in the background (and indeed dictate the letters for the client to sign and send on) instructions to [Hornbuckle] need to come from the client direct.
“Whilst I can see that it is frustrating for the client and the adviser, based on what I have seen I do not think it falls into the remit of not treating customers fairly.
“There must be freedom to contract with those with whom you can maintain a relationship and, in providing the client with a reasonable range of responses, I think [Hornbuckle] probably are fulfilling their TCF requirements.
“Whether they have fulfilled their service requirements may be another question.”
When FTAdviser described a similar situation to the regulator, a FCA spokesperson said: “Whilst product providers are entitled to work with whoever they choose, when taking such a decision they should consider what impact that might have on the end consumer and ensure that they are treated fairly.”
Ms North said she does not believe Hornbuckle’s decision treats her clients fairly. She cited three FCA stated client outcomes including “customers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint”.
The clients say in the letter: “As a result of submitting a complaint, we are now being forced to choose to leave our adviser or else pay a hefty fee to switch provider, leaving us effectively stuck between a rock and a hard place. We do not feel we are being treated fairly.”
The clients now intend in pursuing the complaints via the Financial Ombudsman Service.
