Yesterday (November 23), Tony Flanagan emailed all members of pension schemes administered by Hartley Pensions saying the firm’s entrance into administration in July has posed an “imminent risk” to the value of clients’ pension funds.
In it, he also accused the FCA of "aggressively" pursuing a policy that would harm members' pensions.
Flanagan’s claims have sparked "panic" among scheme members according to other pension firms, such as SeaBridge, and were even branded as “inaccurate” and “incomplete” by Hartley's own administrators, UHY Hacker Young.
The FCA has also said the communication contains "factual inaccuracies" which may have caused concern.
FTAdviser understands clients have been contacting the FCA since the letter was sent in a panic over their pension funds, concerned they could lose thousands in savings.
Flanagan alleged that “as a direct consequence of interventions of the FCA”, the directors were “ultimately given no choice” by the regulator than for Hartley Pensions to be placed into administration.
This led Flanagan to surmise: “There may be an imminent risk that the value of your pension at Hartley Pensions Ltd will be reduced and that funds within your pension scheme will be used to fund administration and liquidation costs.
“If this occurs, it will have a real and significant impact on the value of your pension scheme.”
Backlash
UHY Hacker Young Chartered Accountants hit back at Flanagan’s letter saying it was not approved by them and they have said they will contact all clients "shortly".
In an update on its website, UHY Hacker Young labelled the letter “factually incomplete and inaccurate”.
The administrators have therefore told clients the letter “should not be relied upon”.
In a statement, the FCA said: "Customers’ existing pension assets are currently unaffected by the firm going into administration. They are held by trustee firms, which are not regulated by the FCA and have not entered into insolvency. Pension assets cannot be removed without appropriate consent.
"It is for the administrators to determine how the costs of transferring customers’ Sipps to alternative regulated Sipp operators should be charged.
"However, if any deductions are required to be made from customers’ Sipps, then the administrators will be required to make an application to court and any fees would be subject to the oversight of the court."
This scaremongering is self-serving and causes unnecessary panic and concern.Nathan Bridgeman, SeaBridge SsasUHY Hacker Young has not been able to secure a sale of Hartley’s Sipp business, despite what it called “extensive efforts”.
The administrators said they were in the process of structuring a court-approved plan to transfer out clients’ Sipps on an individual or bulk basis.
“It is not expected that this process will conclude prior to the first quarter of 2023”, they said, adding that Hartley’s small, self-administered pension schemes will be sold in the first quarter of next year to another operator.
SeaBridge Ssas director Nathan Bridgeman has criticised Flanagan's letter for "scaremongering", saying it was "self-serving and causes unnecessary panic and concern" for scheme members".
He added: "It’s very disappointing that this email has been sent to all Hartley's clients regardless of their contract (Sipp or Ssas) or underlying trustee company.
"We have received many calls from anxious clients currently in the process of transferring from Hartley's to ourselves."
Hartley director takes aim at FCA’s ‘hard line’
Hartley, which provides Sipp services to white-label platform provider Hubwise, is wholly owned by Wilton Group.
In March, the City watchdog told Hartley it could no longer accept new clients and a restriction was placed on new business. In August, the FCA confirmed Hartley had entered administration.
The author of yesterday's letter, Flanagan, has been a non-executive chair of Hartley since 2015, and is also a trustee director.
The Financial Conduct Authority appears to aggressively pursue a policy that can only lead to the detriment of pension scheme members.Tony Flanagan, Hartley PensionsHe said Hartley received “a very positive review” as recently as October 2021 from the FCA following the regulator’s visit, and that the Sipp operator had “taken on pensions at risk at the behest of the regulator”.
The letter went on, however, to add: “For some reason that situation changed around February 2022.”
When Hartley fell into administration, Flanagan alleged Hartley was solvent on a cash flow and balance sheet basis, and prior advice was that the company “should be properly marketed and sold as a going concern in order to protect members’ interests”.
He went on: “The issues that arose at Hartley were easy to correct and in no way merited the hard line taken by the FCA that has now resulted in the administration of the company and will in due course lead to the liquidation of Hartley and the potential raid on your pension scheme.
“The FCA appears to aggressively pursue a policy that can only lead to the detriment of pension scheme members.”
Flanagan said the intention was for Hartley to be sold before the FCA’s intervention in March. After that, which the Hartley director said led to a meeting with an interested party and the FCA, the potential sale allegedly “fell apart”.
“No sale has occurred whilst the administrators and their advisers continue to incur the unnecessary costs of a trading administration,” said Flanagan.
ruby.hinchliffe@ft.com
