Self-invested pension provider Hornbuckle Mitchell has been ordered by the Pensions Ombudsman to pay £1,500 compensation to one of its clients, following a catalogue of delays on a transfer which deprived the complainant of making further investments.
Pension ombudsman Tony King has “partly upheld” a complaint made against the Hornbuckle Mitchell Personal Pension Plan for failing to complete a transfer of funds between two US dollar bank accounts held in the Sipp on a timely basis.
Complainant Nigel Atkinson said that he suffered a considerable financial loss as a consequence of the delay, because he could not use these funds to purchase US stocks at the end of December 2013 when prices were favourable.
Hornbuckle Mitchell agreed to Mr Atkinson’s opening a USD account with Stocktrade on 22 October 2013, but then took 15 working days to actually acknowledge this which the ombudsman branded far too long.
It then sent an e-mail to the wrong department at Stocktrade to inform them of their decision, taking another 10 working days to re-send their e-mail using the correct address on 3 December.
On 5 December Mr Atkinson asked Hornbuckle Mitchell to prepare an instruction letter showing that $159,750 (£103,659) should be transferred, but they took over one month to prepare this letter and send it to him.
Mr King states that it is extremely difficult for Mr Atkinson to say what he would have done had the USD account been set up earlier without the benefit of hindsight.
“However, I accept that he lost an opportunity to make investments and that there will have been a moderate, but not precisely quantifiable, loss as a result.
“His disappointment and distress will be proportionate to the possible loss, and the payment to compensate him should recognise that the distress is associated with actual financial harm rather than, for example, a mere disappointed expectation.”
Mr Atkinson calculated that if the transfers had been completed on time, his portfolio would have increased by $23,566 (£15,291) between December 2013 and May 2014.
Mr King states in his determination that he accepts Mr Atkinson lost the opportunity to make investments but the loss was “not precisely quantifiable” and the Sipp provider has been ordered to pay £1,500 as “compensation for the disappointment and distress identified”.
Hornbuckle conceded it should have confirmed to Mr Atkinson that they were happy for him to open a USD account with Stocktrade and provided him with an instruction letter much earlier than it actually did.
However, the firm said it complied with Mr Atkinson’s instructions using the bank account details provided by Stocktrade. Mr King noted that there is no evidence to suggest that, had the transfer process gone more smoothly, Mr Atkinson would have invested the USD funds in the way claimed.
The determination was made on 30 January and Hornbuckle Mitchell were given 28 days to pay the compensation.
peter.walker@ft.com
