Graeme Mitchell, managing director of Galashiels-based Lowland Financial, wrote to Hornbuckle Mitchell chief executive Phil Smith out of “sheer frustration” after two clients with the Sipp provider lodged formal complaints with his firm.
In his letter, seen by Financial Adviser, Mr Mitchell said: “I am writing in sheer frustration to tell you about my recent dire experience of working with Hornbuckle Mitchell.
“Last month, two clients had occasion to complain about your service and this level of dissatisfaction is unprecedented in my experience. They are just furious with Hornbuckle for a variety of administrative and service issues which have impacted on the performance of their respective schemes.”
Both clients were advised by Mr Mitchell to use a Sipp to invest in commercial property with one suffering delays to the transfer of funds to purchase a property, almost causing her to lose it.
Another suffered a three-month delay to the purchase of his property following confusion at Hornbuckle Mitchell over whether the property satisfied its criteria for inclusion in the Sipp.
Mr Mitchell then received a letter from Hornbuckle Mitchell’s service recovery team apologising for “recent poor quality of service” admitting it was “clear we should have been more effective in both our execution of the initial requests and in our subsequent communications with you”.
Mr Mitchell added: “People make mistakes and problems arise but the art of it is how you resolve the problems. There didn’t seem to be any willingness within Hornbuckle and it takes forever to get anything done.”
Mr Mitchell’s gripe is the latest in a string of service issues faced by Hornbuckle Mitchell.
In May, the website FTAdviser.com reported that Hayley North, a chartered financial planner for London-based Rose and North, had her agency removed following her complaints about the Sipp provider’s service, after which Hornbuckle Mitchell refused to deal with her “in any form” leaving two of her clients dealing with them directly.
In March, Graeme Forbes, managing director of Glasgow-based Intelligent Capital, lodged a formal complaint with Hornbuckle Mitchell after being told a lease amendment to a property held within his Sipp could take 30 days.
Hornbuckle Mitchell admitted at the time the provider was experiencing delays and was recruiting to address this.
The company declined to comment on the specific allegations relating to Ms North.
Right to reply
Patrick van de Steen, managing director of product and marketing at Hornbuckle Mitchell, said: “We acknowledge that service delays were an issue earlier this year, but we have addressed this by hiring more people and reviewing our proposition. We are now clear from the outset that if we think a property will be considered difficult under HMRC rules for Sipps, we will alert advisers and clients upfront that our process may take longer, incur higher costs or applications may be rejected.”
Background
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.
Meanwhile, Financial Ombudsman Service figures show Sipp complaints have almost doubled to 1039 cases in the 12 months to April compared to the previous year, with almost three-quarters of the complaints stemming from advice to invest life savings into unregulated and unsuitable investments, and 63 per cent of complaints upheld.
On 28 April the FCA published a formal notice alerting firms to its requirements when they give advice on Sipps and detailing failings it encountered.
It followed concerns from the regulator, voiced in January 2013, that firms were advising on pension transfers or switches to Sipps without assessing the advantages and disadvantages for customers of the underlying investments held.
It subsequently found “serious and ongoing failings” at various firms leading to enforcement action against 1 Stop Financial Services partners Andrew Rees and Timothy Hughes, who failed to comply with rules.
