Fidelity and IFA clash over Sipp transfer

Fidelity and IFA clash over Sipp transfer

The Pensions Ombudsman has sided with Fidelity over an IFA who complained the provider cost his client cash by failing to properly execute a Sipp transfer.

On April 19 2017, Fidelity received a transfer letter of authority for an adviser’s client, who is referred to as Mr E.

The following day Fidelity tried to call the adviser as they did not receive a corresponding application form they would need to submit a Sipp transfer application.

On April 21 Fidelity spoke to the IFA in a phone call, which was recorded.

The IFA had started to submit the transfer request online but had failed to complete this task.

The adviser asked Fidelity how to submit the application for the transfer and the provider explained how to locate the 'manage my client' section of the website.

Fidelity then talked them through the different stages for locating a pending application and the IFA confirmed that Mr E’s details were on this list.

However Fidelity confirmed this meant the IFA had not yet submitted the application and explained how to return to the online process in order to submit it.

During the phone call the IFA said that Mr E had decided not to invest in one of the recommended funds, and that he could see an option on the online portal for altering the fund percentages.

Fidelity confirmed that this could be done at this stage before completing the submission.

But on September 4, 2017, five months after the transfer of funds was first requested, the IFA raised a complaint with Fidelity on Mr E's behalf.

The IFA argued that Fidelity had incorrectly disinvested the funds as part of the transfer process, rather than transferring the funds in-specie, which it believed had caused Mr E a financial loss.

But Pensions Ombudsman Anthony Arter ruled Fidelity shouldn't have to cough up a penny of compensation as the April phone call contained no discussion or comment that an in-specie transfer was required.

Mr Arter said: "Fidelity could not reasonably have known that an in-specie transfer was required. It follows that Fidelity could not reasonably have been expected to provide information on the alternative process for this action.

"I note that the IFA had commenced the online application and that Fidelity had contacted the IFA as the application was flagged as pending. If the IFA had any doubt over which application to use, it ought to have queried this.

"The IFA has argued that it did send a paper application, however the only paper form it sent was the transfer letter of authority.

"Fidelity's role is to provide general information and guidance on its own processes and to correctly administer client instructions.

"Mr E is mistaken in his belief that Fidelity ought to have recognised an error had been made in executing the supposed intention.

"It is not for Fidelity to challenge the client's instruction in a situation such as this, especially given that the instruction came from a registered financial adviser."