Two financial advisers have contacted FTAdviser in recent days on separate issues to complain about service standards at the self-invested pension firm.
This follows the revelation in October that the firm is preparing for a stream of legacy issues as it overhauls its business and undertakes a migration of data to a new digital platform. In particular it said it expected to uncover a number of errors relating to incorrect tax relief submissions.
Colin Johns, director at Principal Financial Planning, told FTAdviser that he was incentivised to transfer around 17 Sipps over to Hornbuckle in 2008, with the provider offering him reduced rates across its fees, including exit fees.
However, this failed to materialise due to what Hornbuckle termed in correspondence “a major breakdown in communication”. Seeking to exit the provider amid claims of poor service, Mr Johns’ clients now face being charged £800 per asset for in-specie transfers to another provider.
Speaking to FTAdviser, Patrick Van de Steen, Hornbuckle’s managing director and head of proposition, who joined in February 2014, said these incentivised deals were offered pre-RDR and had since been withdrawn.
Mr Johns said administrative errors include overpayment of maximum Gad income, annual reviews not being carried out and pension input dates errors. He said Hornbuckle had threatened to report clients to HM Revenue and Customs.
Mr Johns told FTAdviser that Hornbuckle since apologised to clients stating they do not need to report them to the Revenue as they had only overpaid by less than £250.
As a consequence of these catalogue of errors, Mr Johns wants the exit fees removed so his clients can move to another provider.
Mr Van de Steen stopped short of saying fees would be removed, stating that it is standard for Hornbuckle to charge exit fees, but he said “settlements” would be reached for advisers in this position who wish to leave.
Mr Van de Steen said: “We understand that he is not happy and we... don’t want to hold him hostage to our firm. We are going to not create an unreasonable barriers for those that are dissatisfied and want to leave.
“Our firm has changed and with this our business practices are changing and that’s the way it is. We have a new way of business and we want all of our business to be conducted in that fashion.
“We are sorry that creates upheaval; of course it will. We are looking to do a deal whereby those that don’t want to abide with these new rules can leave the firm.”
In a separate complaint that is now with the Pensions Ombudsman, an adviser who wishes to remain anonymous told FTAdviser that over half of the clients he has invested through the firm have had some form of miscalculation of their accounts, with one having to pay back in excess of £500,000.
The case saw the client receive a demand for immediate repayment of £537,000, which had been mistakenly paid into a drawdown pension account.
The IFA told FTAdviser: “The client did get an apology, but Hornbuckle stated that as he had the enjoyment of the funds over the last few years they would not compensate him for the additional tax he has had to pay and also for the additional accountancy costs for going back thorough his accounts over five years.”
The adviser complained that there appeared to be a complete lack of systems and checks, pointing out that two payments of over half a million pounds were sent out.
Mr Van de Steen responded that since the new management team took over and began migrating customer records to digital systems there have been many mistakes found.
He explained that where customers have been overpaid tax relief a swift reimbursement is sought with HMRC, saying this was why some client communications may feel immediate.
“As part of digitising we will find errors, but the policy is simple: we want to get back to the correct position. Workflow has been redesigned so that these things no longer slip through the net.
“We’re working though an internal process and there will be cases which work to the clients advantage, but also those where calculation mistakes disadvantage clients. In this particular case we weren’t able to come to a mutually agreeable decision and it has been referred to the Ombudsman.”
donia.o’loughlin@ft.com, peter.walker@ft.com
