Hornbuckle Mitchell has been ordered to compensate a client after delaying the transfer of self invested personal pensions assets from a financial adviser to his ex-wife.
In a Pensions Ombudsman determination, dated 13 November, two IFAs, identified by the Pensions Ombudsman as Mr Cowie and Mr Hutchison of Medical and Professional Financial Management, are member trustees of the Hornbuckle and Mitchell Sipp, the main asset of which is a commercial property.
Mr Cowie, who was previously married to complainant Ms Stocks, also had a cash investment worth almost £40,000.
When the couple split, Mr Cowie applied to invest £33,000 from the cash fund with Aegon. The application form was signed by all the relevant trustees: Mr Cowie, Mr Hutchison, and a representative of Hornbuckle Mitchell.
However, after the application was signed but before it was submitted, Mr Cowie altered the form to show an initial payment of £2,500 with further payments of £30,500 to follow. The remainder of the existing cash fund, almost £6,500 is still unaccounted for.
Because this change was done in his capacity as financial adviser, Mr Cowie was able to charge 50 per cent commission, taking a fee of £15,450.
Confusion over the court order to transfer the value of the Sipp and Aegon pension to Ms Stock compounded the problem, with Hornbuckle delaying the transfer despite repeated requests and threats of legal action from Ms Stock’s solicitors.
Hornbuckle Mitchell has, at the time of writing, still not transferred the value of the property to Ms Stock, and the fact that it is being left untended means it is steadily decreasing in value, the ombudsman said.
During the divorce proceedings in 2007, valuations suggested the pension to be transferred from Mr Cowie to Miss Stocks was worth £98,216.
Jane Irvine, deputy pensions ombudsman, said in her determination: “The court order was made in December 2007 and a copy sent to Hornbuckle Mitchell Group in January 2008.
“It is now October 2012, almost five years later, and the court order has not yet been implemented. Meanwhile, the value of the fund has dropped considerably.”
The ombudsman ruled that Hornbuckle Mitchell Trustee, Hornbuckle Group and Mr Cowie’s ex-associate Mr Hutchison were each responsible for maladministration and the resulting injustice to the complainant.
Hornbuckle and Mr Hutchison must now sell the commercial property and pay Ms Stocks half of the proceeds from the sale, as well as half of any difference between selling price and valuation for what the property was worth in June 2009, and a total of £1,500 for distress and inconvenience.
Hornbuckle must also transfer the value of the Aegon fund into Ms Stock’s pension plan.
