The Pensions Ombudsman has ordered Hartley Pensions to compensate a client after he complained the defunct provider charged him excessive fees for administering his self-invested personal pension.
The client, Mr T, complained to the ombudsman after disagreeing with the amount Hartley was charging to administer his Sipp.
Hartley has been ordered to pay £1,000 for the distress caused and pay the difference between the Sipp fees the provider should have received and the fees it actually received to put things right.
What happened
The Sipp in question was originally administered by Greyfriars Asset Management but Hartley took this over when it bought the provider in 2018.
Greyfriars applied the following charges to the Sipp: a yearly management fee of £500 and yearly pension drawdown administration fee of £125.
Hartley assured Mr T its takeover of Greyfriars would not have an impact on the Sipp’s investments, administration of the Sipp, or the fees.
In December 2018, Hartley sent Mr T an invoice for £375 in respect of its half-yearly Sipp administration fee, but Mr T said he did not receive this.
In early March 2019 Mr T complained to Hartley that he had not received any income payments from the Sipp in respect of the period to February 2019.
A few weeks later Hartley responded telling him of his outstanding invoice.
Hartley then wrote to Mr T telling him that when Greyfriars was the administrator of the Sipp the fees were more than £900 in total, as they included services such as administration, advice and discretionary fund management.
Hartley did not provide some of these services, so its invoices were updated, to ensure that Mr T only paid for the service he received.
But Mr T pointed out the invoice he received included fees in respect of a period that predated Hartley's appointment as Sipp administrator.
Hartley then explained how it had reached the figure given to Mr T.
The client accepted this and paid £725 in fees.
Later in June 2019, Hartley received a payment of £1,712 from the Sipp.
The next month, Mr T complained to the provider saying Hartley had received a total of £2,087 since taking over the Sipp but at no time had Mr T been informed of a new fee structure or had agreed to the fees.
In June 2020, a yearly review of Mr T’s Sipp showed Hartley’s fees and charges were: a yearly management fee of 0.5 per cent, plus VAT, applied to all funds in the Sipp.
It also included investment fund charges, depending on Mr T’s investment choices. This was shown as “zero”, based on his existing investments.
It also outlined adviser charges but Hartley was not making any payments to Mr T’s financial adviser for arranging the Sipp.
