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Hartley administrators and FSCS

ursaminortaur
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Hartley administrators and FSCS

#632013

Postby ursaminortaur » December 6th, 2023, 11:26 am

It seems that administrators are once again going after client SIPP funds which are held in trust to cover the administration costs but this time the FSCS appear to be trying to wipe their hands of the issue and refusing to cover the costs via the FSCS compensation.

https://www.ftadviser.com/pensions/2023/12/05/hartley-administrators-could-charge-sipp-holders-37mn-to-transfer/

UHY Hacker Young, the administrator, is expected to apply to the courts for permission to charge Sipp account holders the “exit and administration charge”.

Around 100 people joined an online meeting on Monday night (December 4) chaired by Gareth Fatchett of FS Solicitors, the firm acting for the Representative Respondents.

He told concerned investors: “The reason they're going to make a court application is because they need to have a court blessing that they can reach into the trustee companies, which hold your assets, to take the payment.

“That is part of a winding down plan to get rid of the assets and take your accounts out of Hartley, and in order to make sure things move on.”
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On Friday (December 1) the Financial Services Compensation Scheme confirmed any exit and administration charges would not be eligible for redress by the body.

It said: “Although the joint administrators have given FSCS some examples of alleged administrative failings by Hartley in relation to some of its customers, it is not clear to us that a court would find that these failings would be a breach of a regulatory rule, contractual term or duty of care owed to the customer or that they directly caused a loss to the customer.

ursaminortaur
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Re: Hartley administrators and FSCS

#632019

Postby ursaminortaur » December 6th, 2023, 11:49 am

ursaminortaur wrote:It seems that administrators are once again going after client SIPP funds which are held in trust to cover the administration costs but this time the FSCS appear to be trying to wipe their hands of the issue and refusing to cover the costs via the FSCS compensation.

https://www.ftadviser.com/pensions/2023/12/05/hartley-administrators-could-charge-sipp-holders-37mn-to-transfer/

UHY Hacker Young, the administrator, is expected to apply to the courts for permission to charge Sipp account holders the “exit and administration charge”.

Around 100 people joined an online meeting on Monday night (December 4) chaired by Gareth Fatchett of FS Solicitors, the firm acting for the Representative Respondents.

He told concerned investors: “The reason they're going to make a court application is because they need to have a court blessing that they can reach into the trustee companies, which hold your assets, to take the payment.

“That is part of a winding down plan to get rid of the assets and take your accounts out of Hartley, and in order to make sure things move on.”
.
.
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On Friday (December 1) the Financial Services Compensation Scheme confirmed any exit and administration charges would not be eligible for redress by the body.

It said: “Although the joint administrators have given FSCS some examples of alleged administrative failings by Hartley in relation to some of its customers, it is not clear to us that a court would find that these failings would be a breach of a regulatory rule, contractual term or duty of care owed to the customer or that they directly caused a loss to the customer.


Just to add

It is high time that this type of situation was sorted out. I'd suggest

1). Require all Pension providing companies to have insurance to cover any shortfall in funds to pay for their own administration.
2). Classify failure to have such insurance as negligence so that clients with funds in trust are protected by the FSCS.
3). FSCS to check whether companies have such insurance cover.
4). Make board members personally liable to compensate the FSCS for failure to obtain and maintain such cover ( This measure in place so that companies in trouble don't just cancel such insurance to save money).

ursaminortaur
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Re: Hartley administrators and FSCS

#646117

Postby ursaminortaur » February 10th, 2024, 4:31 pm

There is an article in the FT about the woes of those with the failed Hartley Pensions group. The good news is that after complaints from SIPP holders the FSCS has once again agreed to cover the administrators costs the bad news is that after 18 months this is still dragging on.



https://archive.is/2024.02.10-065224/https://www.ft.com/content/3e4bbd98-7d99-4dce-93eb-2c747aad1ce5

Retirement savers ensnared in the protracted wind-up of the failed Hartley Pensions group say they are being driven to the “edge of despair” as uncertainty lingers over the future of their nest eggs.
Jonathan Booth, 64, from Hertfordshire, is one of around 17,000 customers of the Bristol-based Hartley Pensions who have been unable for 18 months to transfer their funds — totalling about £1.3bn — to other providers after the self-invested personal pension (Sipp) company was placed into administration.
Fruitless attempts to find a buyer for the stricken business, and ongoing efforts by the administrator to reconcile the various pension books acquired by Hartley over the years, have led to delays.
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The strains of the administration on Booth and other Hartley customers was exacerbated by the administrator imposing a transfer ban.
There was a further setback for trapped customers when the administrator sought court approval to replace annual management fees with an “exit and administration charge (EAC)” designed to cover its costs, which it initially estimated at around £40mn, or 2-3 per cent of total assets.
For Booth, this meant a £4,000 knock to his pension. “This was a further blow,” he said. “It came out of the blue”.
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After pressure from Sipp holders’ lawyers, the Financial Services Compensation Scheme, the safety net for customers of failed firms, confirmed it would step in to cover the administrator’s charges, now estimated at around £31mn.
However, lawyers said this did not fully resolve matters for embattled Hartley customers.
“The statement made by the FSCS does not provide all the detail at this stage,” said Gareth Fatchett, solicitor at FS Legal, which is acting for Hartley customers. Many people faced wider losses after being in limbo for 18 months, he added.

Former pensions minister Baroness Ros Altmann said Sipp investors needed better protections. “The costs of administration of failed pension firms, which are uncontrolled, need to be handled differently, as it could become a licence to charge money without adequate scrutiny,” she said.
While the immediate need was to resolve the issues facing customers, said Ross of Which? Money, “there will rightly be a time for asking serious questions about the actions of the regulator and administrators in this case”.
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A Treasury spokesperson said: “The FSCS announced last week that they will provide compensation for customers of Hartley Pensions to fund the movement of customers away from Hartley to other Sipp providers.”





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