Ombudsman orders Sippcentre to pay £13k for transfer delay

Ombudsman orders Sippcentre to pay £13k for transfer delay

AJ Bell’s Sippcentre has been ordered to pay almost £13,000 into a consumer’s self-invested personal pension for delaying a pension transfer by around four weeks, according to a decision published by the Pensions Ombudsman.

The case concerns Clive Thomas, who complained that Sippcentre delayed transferring his Sipp to another arrangement with Alliance Trust, causing him financial loss.

Deputy pensions ombudsman Jane Irvine found the delay constituted “maladministration” by Sippcentre.

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As a consequence, Ms Irvine told the Sippcentre, now called Investcentre, to pay £12,951.46 into Mr Thomas’s new plan with Alliance Trust, plus interest.

The Sippcentre was also ordered to pay Mr Thomas £75 in compensation for distress and inconvenience.

The case stems from 4 April 2013 when Sippcentre emailed Mr Thomas’ investment partners Seven Investment Management, requesting they close his Sipp account and transfer the proceeds to a cash account.

Sippcentre received £384,174 from 7IM on 11 April, but did not receive confirmation of the payment or whether the account was closed, eventually contacting 7IM on 23 April for confirmation of closure.

On 24 April 7IM informed Sippcentre the account could not be closed until mid-May, with the full balance of the Sipp finally being transferred to the new provider Alliance Trust on 7 May.

Mr Thomas wrote to Sippcentre in July 2013 providing his own calculation of the financial loss caused by the delay, based on a price comparison of the investments he purchased immediately on 8 May, compared with the prices on 9 April.

His calculation showed a total loss on investments during this period of £22,183.99 plus £994.46 for lost dividend payments.

He also asked for an additional £250 for the distress and inconvenience caused.

Sippcentre wrote to Mr Thomas that August, offering interest of 2.5 per cent on the transfer amount, for the delay period of 19 days, equating to £502.55 in interest plus £75 for any inconvenience and distress caused.

Alliance Trust’s subsequent calculations showed it would have cost Mr Thomas £12,951.46 more to purchase the same number of units on 8 May than it would have cost him on 18 April.

Ms Irvine said: “In other words Mr Thomas’ financial loss resulting from the delay is £12,951.46. I therefore uphold Mr Thomas’ complaint against Sippcentre on the basis of his financial loss as calculated by Alliance Trust.”

This is not the first time Sippcentre has been accused of such failings, with FTAdviser reporting last month that an adviser was seeking to move the vast majority of his clients away from AJ Bell after changes to its system resulted in a number of errors on accounts.

Andy Bell, chief executive of AJ Bell, told FTAdviser: “We are naturally disappointed with this decision which relates to a transfer from nearly two years ago. The transfer was delayed by 19 days, with extenuating circumstances as to why it wasn’t processed sooner.”