Sipp provider Hornbuckle Mitchell has apologised to a former client after it demanded he pay thousands of pounds upfront for five years’ worth of annual management fees.
The issue centred on the Quadris Forestry fund, which was suspended back in 2011 because it lacked the liquidity to meet redemption requests.
The client, who is advised by Beaufort Asset Management, had invested in the fund via a Hornbuckle self-invested personal pension (Sipp).
However, when transferring his pension savings to a different Sipp provider, the client was unable to move the money invested in the troubled Quadris fund, and was therefore forced to keep the Hornbuckle Sipp open to hold the asset.
Because of this, Hornbuckle agreed to waive the annual fee for the Sipp.
But in February this year, the client received a bill from Hornbuckle demanding that he pay £3,096 in outstanding annual management fees dating back to 2012.
The client was concerned about the bill and contacted his adviser at Beaufort, who then agreed to take up the issue on his behalf.
In a letter sent to the client this month, seen by FTAdviser, Hornbuckle’s managing director, Paul Downing, confirmed that this was an error, meaning the fees were not due.
“Please accept my apologies for the distress and inconvenience we have caused you,” Mr Downing stated.
He also emphasised that the firm would not be charging any fees for facilitating the transfer of the remaining Quadris Forestry asset to another provider.
A spokesperson from Hornbuckle said: “This incident, caused by human error, was rectified as soon as we became aware and we have apologised to the IFA and client involved.”
Hornbuckle, which is owned by the Embark Group, is currently working with Beaufort to transfer the asset out of the Sipp so it can finally be closed down.
Speaking to FTAdviser, Mark Dolby, director at Beaufort Asset Management, said he thought other customers should be aware of this issue in case they end up paying out thousands in fees unnecessarily.
katherine.denham@ft.com
