Hartley Pensions

Latest on Hartley Pensions – FSCS declares default

The Financial Services Compensation Scheme has declared Hartley Pensions in default allowing it to pay compensation on clients’ exit charges.

The FSCS announced on 21 February 2024 that the pension provider had failed following the finalising of an agreement with the Joint Administrators.

This agreement allows compensation to be paid by the FSCS for the benefit of Hartley SIPP Clients in respect of costs for the exit strategy.

The FSCS says it has paid the compensation into a trust account which the Joint Administrators will use for this purpose.

Although Hartley’s is in default, the FSCS says that for the time being it will not open to claims for matters other than the costs of the exit strategy.

It assured customers that there will be an opportunity for them to raise other claims against Hartley’s in the future.

Exit and Administration charge

The Administrators of Hartley Pensions, UHY Hacker Young, applied to the courts for permission to implement an “exit and administration charge” against the assets clients hold within their Sipps.

This was intended to replace the current annual SIPP management fees and enable clients to eventually transfer out – a process which clients have been told could take 12 months.

In January a spokesperson for Hartley’s Administrators told FT Adviser: “Without additional finance from the government or regulatory bodies, the cost of resolving the problems found at Hartley does fall with the customers of Hartley.”

In December 2023 the FSCS issued an update saying it wasn’t able to pay compensation to Hartley Pensions’ SIPP clients for the Exit and Administration Charge. It clarified that it did not consider the charge would be a protected claim under its rules.

However in January 2023 it announced that following new evidence it now considers the EAC can be protected under its rules.

Hartley’s expected to ‘run out of money’

Administrators of Hartley Pensions reportedly warned that the firm would ‘run out of money by the end of January’ increasing the risk of liquidation.

According to reports UHY Hacker Young have said that the income from management charges was insufficient to trade for the foreseeable future.

An FSCS update said that in the event of a liquidation the SIPP schemes might be deregistered by HMRC, which could trigger a tax charge for individual customers.

It’s estimated more than 16,000 people are affected by the Hartley issues with concerns that many are not being kept “in the loop.”

What happened to Hartley Pensions?

On July 11th Hartley Pensions asked the FCA to impose requirements preventing it from accepting ongoing contributions into the SIPPs/SASSs administered by it.

The FCA agreed and in a statement said: “The requirements have been imposed due to a number of serious operational and regulatory issues that the firm are attempting to deal with and is intended to protect all of the firm’s customers.”

This wasn’t the only restriction placed on Hartley Pensions by the Financial Conduct Authority (FCA).

In March 2022 the FCA ordered Hartley’s to stop accepting new business unless it had expressed authorisation from the regulator.

This came following Asset Restriction and Client Funds requirements which were placed on the firm in February 2022. This meant Hartley’s couldn’t dispose or transfer any assets or client funds without prior consent from the FCA.

When did Hartley Pensions go into Administration?

On 29 July 2022 the directors of Hartley Pensions placed the firm into administration.  

The Financial Conduct Authority (FCA) also requested that Hartley Pensions go into an insolvency process in the interest of clients.

In November 2022 Hartley Pensions Director Tony Flanagan caused ‘panic’  when he sent a letter to Pension Scheme members blaming the FCA for pursuing an “aggressive position leading to the administration and closure of the business”.

Is Hartley Pensions in default with FSCS?

The Financial Services Compensation Scheme (FSCS) declared Hartley Pensions in default on 21 February 2024, to allow it to pay compensation in respect of the exit strategy costs.

The FSCS says it will not be open to other claims for the time being. This is to allow FSCS and the Joint Administrators to prioritise the work needed to get the transfer process underway.

It assured customers that there will be an opportunity in the future to raise claims against Hartley for matters other than the costs of the exit strategy.

Hartley’s SIPP members do not need to do anything at this time.

What did Hartley Pensions do?

Hartley Pensions provided financial services, including administering SIPPs.

They were previously known as Hartley Lifetime Pensions Limited and joined the Wilton Group in 2016.

The Wilton Group also provides financial services and was founded by the Director of Hartley Pensions.

Failed Hartley Pensions SIPP Providers 

In the last few years Hartley Pensions  purchased the SIPP business of several failed Providers whose SIPPs were linked to mis-selling complaints. These include:

Lifetime SIPP

The Lifetime SIPP Company Ltd went into administration in 2018 reportedly due to the volume of complaints made against them.

Many of these complaints involved SIPP investors’ exposure to unsuitable high-risk investments such as:

  • Ethical Forestry
  • InvestUS
  • The Resort Group
  • Harlequin Property

Guardian – GPC SIPP Ltd

Guardian GPC SIPP Ltd went into administration in as a result of some of the failed investments associated with its SIPPs. These include:

  • Harlequin Property
  • Ethical Forestry
  • Harmony Bay
  • InvestUS
  • The Resort Group

In July 2023 it was reported that compensation claims against GPC SIPP Ltd / Guardian have exceeded £67m.

Guinness Mahon 

In Feb 2020, Guinness Mahon Trust Corporation Ltd entered into administration

They had received complaints regarding historic high-risk investment and the due diligence carried out before accepting these investments into client SIPPs. These high-risk investments included:

  • AIGO funds 
  • Ethical Forestry 

In September 2023 it was reported that the FSCS has paid out almost £40m in compensation for claims against Guinness Mahon Trust Corporation.

Berkeley Burke 

Berkeley Burke SIPP Administration Ltd went into administration in September 2019. Some of the high-risk investments linked with Berkeley Burke SIPPs are:

  • Store First Storage Pods
  • GAS Verdant Australian Farmland
  • InvestUS – US property
  • Harlequin Property

Greyfriars Asset Management 

Greyfriars Asset Management went into administration in October 2018.  Their Portfolio Six contained unregulated, high-risk investments which were unsuitably marketed to investors. These included:

  • Lanner Car Parks 
  • The Resort Group

Want an expert opinion on Hartley Pensions? – Try our free assessment check

Whilst each case is individual, as mis-selling specialists we know to look for certain signs that in our experience indicate that mis-selling may have happened.

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Key Facts

Hartley Pensions entered Administration in July 2022
The FSCS declared Hartley Pensions in default in February 2024, however it is not open to individual claims at present.
If you want to know if you may have a case to claim compensation - our free initial assessment can help!

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