Hargreaves told how it should have dealt with Sipp transfer

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Hargreaves told how it should have dealt with Sipp transfer

Hargreaves Lansdown Asset Management has been ordered to pay £127.56 to a client for money she lost when her Sipp was incorrectly transferred in cash rather than in-specie.

A client, referred to as Ms F, decided to transfer her accounts to Hargreaves Lansdown and completed the Bristol-based company's multi-transfer form, which asked her to read key features as well as terms and conditions.

On 21 September 2016 Hargreaves Lansdown sent a firm – referred to as Company A - a cash transfer request for Ms F's Sipp.

This was done through an online pension transfer system.

Company A picked up Hargreaves Lansdown's transfer request and emailed Company P requesting that Ms F's Sipp be liquidated.

When Ms F received Hargreaves Lansdown's letter to confirm the transfer, she telephoned them to say her Sipp transfer was meant to be in-specie and not cash.

Hargreaves Lansdown updated the online pension transfer system the following day to reflect this.

But when Hargreaves Lansdown chased Company A in October for an update on the progress of Ms F's transfer, Company A responded two days later to say that the disinvestment of Ms F's Sipp had already occurred and that it was in cash.

Unhappy with the process, Ms F complained to Hargreaves Lansdown in November and asked to be compensated for the losses she incurred as a result of her Sipp being transferred in cash rather than in-specie.

Hargreaves Lansdown responded by saying that based on the transfer form Ms F had completed it was satisfied that it had acted in accordance with the instructions provided.

However, it offered Ms F £100 for not making her aware at the outset that it was too late to amend her transfer instructions when she contacted them.

Disappointed with the result, she took the matter to the Financial Ombudsman Service (Fos).

Chillel Williams, an ombudsman with the Fos, upheld part of the complaint.

The ombudsman did not think Hargreaves Lansdown was responsible for the fact Ms F may have overlooked or not read all of the documentation she was provided with.

However, the ombudsman said that when Ms F contacted Hargreaves Lansdown to correct details about the transfer of her Sipp, Hargreaves Lansdown's reaction was not quick enough.

In a final decision, the ombudsman said: "Given the urgency of the amended instruction and cancellations that needed to be made, I am not satisfied that Hargreaves Lansdown's response, which was to put a note on the online pension transfer system saying Ms F's transfer should now be in-specie, was appropriate.

"I think it would have been prudent for Hargreaves Lansdown to have tried at least calling or emailing (the) companies directly when it became aware that Ms F's transfer request had not been put through as she had intended."

Therefore, the ombudsman said it require Hargreaves Lansdown Asset Management to pay her £27.56 for the difference in the amount she had to repurchase her holding and the amount it was originally sold for when it was disinvested.

This was in addition to the £100 already offered by Hargreaves Lansdown Asset Management.

aamina.zafar@ft.com