Hartley Pensions has been cleared by the ombudsman after its failure to submit a buy-back request on a storage unit investment was not deemed to have caused the client's losses.
Hartley Pensions Trustees Limited came out of the Pension Ombudsman decision with a small penalty after its client complained that his request for a buy-back option on his Storefirst storage units was not exercised within the specified timeframe.
The complaint was partly upheld by the ombudsman resulting in the provider only having to pay out £500 in compensation for the inconvenience caused.
The client, who the Pensions Ombudsman called Mr T, claimed that the provider's failure to submit his buy-back request had led to a financial loss as he is still paying annual management charges for his self-invested personal pension, through which he invested in the storage units.
Mr T opened a Lifetime Sipp with Hartley in November 2011 and in May 2012 he purchased storage units via a sub-lease from Storefirst through his Sipp.
The sale included an option to purchase agreement which meant Mr T could submit a request that Storefirst bought back the units within one month of the fifth anniversary of the sale completion at the original sale price. Though this was at the “absolute discretion” of the company.
In February 2017 Mr T wrote to Storefirst requesting that it exercised the buy-back option on the units but his request was refused because it was not submitted within the correct one-month period.
Therefore in March 2017, Mr T got in contact with Hartley to query when he could submit his buy-back option.
Hartley told him that the fifth anniversary of the purchase was May 18, 2017 and said it would keep a copy of Mr T’s request form and send it to Storefirst on the relevant date.
But Mr T subsequently complained to the Pension Ombudsman in July 2017 after he found out that his request was not submitted.
He said that Hartley had failed to submit the buy-back option request form to Storefirst and he was now making a significant financial loss on the units.
Mr T also said that it was unfair that he was liable for further annual management charges charged by Hartley because of its error.
Hartley apologised for the human error which had caused the form to not be submitted but argued that Storefirst had discretion to exercise the buy-back option and there was no guarantee that it would have chosen to do so.
The provider also said that the annual management charge was still payable because the Sipp was still being actively managed and Mr T still owned the units.
An adjudicator found that although Mr T had been disadvantaged, Hartley’s error did not cause Mr T to sustain a financial loss.
Mr T has already been compensated by the Financial Services Compensation Scheme in relation to being mis-sold Sipp investments but this has not altered the fact that Mr T still owns the units and they are still held within the Sipp.
Therefore, Mr T is liable for the annual management charge on the units.
But the Pension Ombudsman found Hartley’s failure to submit Mr T’s request to Storefirst caused him significant distress and inconvenience therefore Hartley should pay compensation.
Hartley was ordered to pay Mr T £500.
amy.austin@ft.com
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