SIPPApr 27 2023

Clients may have to wait a year to get Sipp assets from Hartley

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Clients may have to wait a year to get Sipp assets from Hartley
Hartley Pensions clients have been struggling to transfer their Sipp assets, FTAdviser has learned. (Andrea Piaquadio via Pexels)

Clients may have to wait more than a year before they can transfer their Sipp assets from Hartley to another provider, administrators have admitted.

FTAdviser has spoken with advisers and clients who have complained to Hartley Pensions and their administrators UHY Hacker Young after having difficulties moving assets held within their Hartley Sipps.

One adviser said he is battling to get his vulnerable clients’ transfer completed as soon as possible but to no avail.

He has complained to his MP, as well as submitting a formal complaint with Hartley and its administrators, but he told FTAdviser months have passed without his clients being able to get their money.

But even if clients are eventually able to get their funds transferred, they will be subject to an administration fee upon exit.

Financial advisers need to do their due diligence to avoid their clients being with the next Hartleys.Nathan Bridgeman, Seabridge Ssas

FTAdviser understands that part of the administration process is to reconcile all the assets that Hartley administers on behalf of clients, which is about £1.2bn, to make sure the assets are securely held by the trustee companies. 

The administrators said this is a time-consuming process, but expect to have completed this by the end of this month (April).

Alongside this, UHY Hacker Young is preparing an application to court to ask it to ratify a charge that the administrators will make against the assets that clients hold within their Sipps - this would mean that clients can start transferring their money, FTAdviser understands.

But there is no definitive timescale set for when people can get their money.

FTAdviser has seen a letter to clients saying that the administrators are proposing to value each client's holding as at March 31 and use this value to calculate the charge. 

Therefore, for a limited period, the administrators will be restricting drawdowns to £1,000 per month.

'Unacceptable'

However, Nathan Bridgeman, director at provider Seabridge Ssas, said this was “unacceptable” from the administrator.

He added: “It sets a very dangerous precedent. Financial advisers need to do their due diligence to avoid their clients being with the next Hartleys, but before we get to that the FCA and TPR surely needs to step in here.”

FTAdviser understands that whether or not administrators can restrict how much goes out of a Sipp would depend on the scheme rule and terms and conditions governing each individual Sipp.

However, in all circumstances, firms must treat customers fairly in line with the FCA's Principle 6. The FCA's understanding is that the restrictions placed on withdrawals from Hartley have now been reversed.

Peter Kubik, joint administrator, told FTAdviser that an administration is a collective process and therefore all clients need to be treated equally and so one client cannot get transferred out ahead of another. 

I am absolutely amazed that for want of a signature from somebody at Hartley or the administrators, it can't be done.Client of Hartley Pensions

However, he pointed out that there is a vulnerable policy in place and each claim is dealt with on case by case in these circumstances.

For the rest of Hartley’s clients it is estimated that the process of transferring out all client Sipps will take approximately 12 months or longer.

Kubik said: “The company does not have sufficient funds to trade for this amount of time or cover the costs involved. 

“A charge to the clients must therefore be made, however I am considering whether there are any alternative viable options to this charge and therefore I am engaging with the FSCS to consider processes which may ensure that clients are compensated for the charge.”

He added: “The funds are perfectly secure, but we are required to restrict the complete draw down of a client’s fund. This is because we need to make sure that sufficient funds are left in the Sipp so that the costs of administration and exit can be covered. Unfortunately, that charge has not been determined.

"An informal committee of clients, Independent Advisors and client group representatives has been formed to assist me to formulate a charge to clients which we believe will be fair.

"Discussions on this charge are still ongoing.”

Vulnerable clients

Adviser Julian Pruggmayer has been trying to help a husband and wife, both of whom are considered vulnerable, to transfer their Sipp funds away from Hartley Pensions.

Pruggmayer has said he already supplied information to Hartley regarding the transfer, as part of the due diligence. He has also supplied enough medical evidence to prove at least one of his clients is vulnerable - but still no joy from the administrators. 

Pruggmayer said: “My clients found their pension being transferred from Greyfriars Asset Management to Hartleys under approval of the FCA. Within less than three years Hartleys enter administration, someone at the FCA has some serious questions to answer.”

FTAdviser understands that the clients have been advised that UHY Hacker Young will arrange for the payments out; however an administrative exit fee and charge will be applied to each account - leaving clients out of pocket through no fault of their own.

At the time of writing the clients have not yet received their funds.

One client, Tony Potts, told FTAdviser: “[My wife] just wants to have peace of mind that her funds are secure, that she can take her funds, and I can take mine, whenever we want to.

“I am absolutely amazed that for want of a signature from somebody at Hartley or the administrators, it can't be done. You'd think in the 21st century that your long-term pension is going to be secure.”

Joint administrator Kubik, said: “While clients are still able to continue to receive their normal pension payments, I have restricted their ability to move their SIPPs to new managers due to the process that is being undertaken.

"While I understand that clients may not like this, it is the only way of treating all clients fairly.

“An administration is a collective process and therefore all clients need to be treated equally and so one client cannot get transferred out ahead of another."

Last year, a director was criticised for writing a scaremongering email to Hartley clients, as FTAdviser reported.

amy.austin@ft.com