Mattioli Woods: £12m ‘missing’ from HD Sipp

The “vast majority” of schemes in the self-administered personal pension HD Sipp may not be able to recover funds due in part to a £12m gap in the Sipp’s bank statement.

Pensions consultancy Mattioli Woods recently took over administration of the HD Sipp, whose former operator HD Administrators LLP is under investigation by the Serious Fraud Office.

The SFO last year called on advisers who have clients invested in HD Administrators to come forward with information.

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Bob Woods, executive chairman of Mattioli Woods, told FTAdviser a bank statement from a “master” account, which should contain money from many member schemes, wrongly said the account contained £12m when in fact it contained “closer to £20”.

Of approximately 300 schemes within HD Sipp, Mr Woods warned that 260 may not be able to recover funds while only 30 or 40 seem to have “no real issues”.

He said: “We have evidence of a bank statement of the master scheme which showed balances of £12m which didn’t exist. We believe that was shown to clients.

“There is an inadequate paper trail for the assets and bank balances for the majority of the HD Sipps.”

In November 2012 former regulator the Financial Services Authority banned and publicly censured HD Administrators partner Michele King for failing to understand or fulfil her regulatory responsibilities.

The Insolvency Service this month published an update on HD Administrators, saying: “On 22 March 2012, the Financial Services Authority - now the Financial Conduct Authority - took action to remove the permissions granted to HD Administrators LLP to carry on regulated activities, following the arrests of two of the HD Sipp Trustees.

“A large number of the investments made through the HD Sipp were unregulated, and are expected to have little or no remaining value.”

Although Mattioli Woods only announced that it had become the administrator of HD Sipp when it released its annual results, Mr Woods said the announcement followed weeks of due diligence in which these problems came to light.

He added that there is still a possibility that these unaccounted-for assets could be in investments or accounts and that no clients may end up losing money, but that to expect that outcome could be overly optimistic.

HD Sipp is not the first pension Mattioli Woods has adopted. In January 2010 the company took on Freedom Sipp from the scheme’s liquidators PricewaterhouseCoopers. In June 2012 the Bank of Scotland asked Mattioli Woods to operate its Pilgrim Sipp.