Hornbuckle must compensate a couple after poor service led to them transferring their Sipps to another provider.
The couple, Mr and Mrs X, complained to The Pensions Ombudsman that Hornbuckle had not paid enough compensation after issues with poor service.
The couple wanted Hornbuckle to compensate them and their adviser in full for additional costs related to the way the transfer was carried out and the way the company dealt with their complaint.
Mr X complained Hornbuckle had promised him in a December 2013 meeting that their administrative service for the Sipps would improve and, when it did not, he was left with no choice but to transfer to another provider.
Hornbuckle failed to pay invoices or organise online access to the Sipps’ group bank account within the agreed timeframe. It agreed to refund half of the couple’s annual £245 administration fee each in recognition of the poor service.
Hornbuckle later also mistakenly overpaid the couple’s adviser fees due from the Sipps by £1,080. It was then agreed the overpayment would be used to offset fees payable to the adviser in 2014.
In September 2014, Mr X decided to transfer the Sipps’ administration to Liberty Sipp.
The couple’s adviser claims Hornbuckle had previously incorrectly split the Sipps’ funds allocated for investment in unit trusts through Cofunds, with an incorrect split for the cash held in the Sipps’ group bank account.
But the adviser argued the split should have been the same as for the couple’s shares of a property. Liberty then had to rectify this issue and the couple also sought the help of the adviser.
Apology and compensation
In January 2015, Hornbuckle apologised for its errors and continued poor service. But it did not agree to waive the transfer fee or pay the adviser fees incurred in helping the couple, saying it had already paid “adequate compensation” of £1,940 plus VAT to the couple and £1,000 plus VAT to the adviser.
It also said it was not responsible for incorrectly splitting the Sipps’ funds.
The couple complained to TPO, adding the adviser’s involvement was “essential to deal with the lengthy and technical responses submitted by Hornbuckle”.
A breakdown of Hornbuckle’s fees incurred relating to the transfer – including the adviser fees – totalled £21,154.55.
The case was referred to deputy pensions ombudsman Karen Johnston, who partly upheld the complaint. She ruled Hornbuckle should reimburse the couple the £3,534 in fees payable to it and its solicitors to carry out the transfer of the Sipps’ administration to Liberty.
The ombudsman also says Hornbuckle should pay the couple £2,000 for distress and inconvenience.
On the advice costs incurred, the ombudsman says there is a difference in communicating with a scheme to address poor administration and any professional costs incurred through later complaining to the ombudsman.
The decision says: “When the applicant or his/her representative has completed reasonable work to help sort out an issue with the respondent itself, I will consider making an award to account for expenses directly incurred as a result of any maladministration which I find to be proved.”
The ruling says it was reasonable for the couple to work with an adviser to resolve the administration failures.
But it adds: “In this case I have been provided with no evidence of hours billed to achieve that outcome. Moreover it has not been demonstrated that all of the costs claimed have actually been billed.
“In those circumstances I conclude there is no sufficient evidence of loss incurred directly as a consequence of the maladministration and I am restricted to considering the distress and inconvenience caused. I accept that it was significant, requiring adviser assistance to resolve at some cost.”