SIPPJun 25 2019

Cofunds apologises for IT issues with hamper

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Cofunds apologises for IT issues with hamper

A Cofunds client has been sent a hamper after claiming the provider's botched replatforming exercise had led to a potential investment loss of £25,000.

The client of pension platform Cofunds, which became part of Aegon in May 2018, complained to the Financial Ombudsman Service about not being able to access his self-invested personal pension (Sipp) which he claimed had lead to losses of £25,000.

Aegon’s integration of the Cofunds platform it bought for £140m in 2016 had caused a litany of problems for months, including clients not receiving income payments on time and other IT related issues.

The client, who the Fos called Mr B, first had difficulties with online access to his Sipp account in May 2018 and complained to Cofunds.

To begin with he was unable to view the value of his Sipp and later this value was showing incorrectly as nil.

It was two weeks before he was able to view his valuation but other problems continued and Mr B was unable to switch funds or sell investments online.

Mr B has claimed that he would have an extra £25,000 in his Sipp if he had full online access to manage his investments and that he could have avoided a fall in the value of his investments of about £15,000 between August and October 2018.

Cofunds accepted there had been errors and sent Mr B a hamper, which it said was worth £125.50, to apologise. 

It later offered £100 compensation but Mr B turned this down and instead complained to the Fos.

Ombudsman Greg Barham said: "As I understand it, these issues began in May 2018 and have not yet been fully resolved. So I agree Mr B should be compensated for the time, trouble and inconvenience he has experienced."

However he agreed that the £200 proposed by the adjudicator and the hamper Cofunds had previously sent were reasonable compensation for the IT errors. 

The Fos came to this conclusion as it argued that Mr B was able to manage his investments offline, for example by requesting fund switches and providing other instructions to Cofunds.

Mr Barham said: "I think it follows that if Mr B could have made fund switches and managed his investment, despite the fact his online access was disrupted, then his claim for losses due to not being able to manage his investments should not succeed."

The ombudsman added that even if Mr B had not been able to manage his investment there was little evidence to show that he would have been able to avoid the £15,000 fall in the value of his investment. There is also no evidence that his Sipp would have made £25,000.