James Hay is embroiled in a dispute with IFA firm Bryden Johnson after calculation errors meant the provider overstated a client’s pension by £100,000.
Bryden Johnson has accused James Hay of “failing to maintain adequate records or execute benefit calculations accurately” since the client took out a Sipp policy in 2006.
James Hay has rejected the client’s compensation claim, saying the fault for the calculation errors lies with the IFA.
Bryden Johnson IFA Tom McMahon says James Hay omitted details of a pre-A-Day pension in payment, which had been placed into the company’s Sipp, in its calculations.
McMahon says the client also applied for enhanced protection for the pre-A-Day fund which was in excess of the lifetime allowance and had a restricted tax-free cash allowance.
However, McMahon says the provider failed to take this into account in its future benefit calculations. Instead, the first vesting calculation provided for a 25 per cent tax-free cash payment on the entire fund, rather than 25 per cent of the lifetime allowance.
As a result, he says the provider overstated the amount of future benefits available to the client by around £100,000.
But James Hay business development director Richard Mattison says: “The IFA is culpable because we are only as good as the information we are given and we were given misleading information.”
The client, who wishes to remain anonymous, is set to take his complaint to the Financial Ombudsman Service.