Hartley Pensions Ltd

01 Dec, 2023

We are aware that the Joint Administrators of Hartley Pensions are proposing to seek the approval of the court to charge SIPP clients an Exit and Administration Charge. This charge will cover the costs of the administration of the firm.  

FSCS is not able to pay compensation to Hartley Pensions’ SIPP clients for the Exit and Administration Charge, as we do not consider that this charge would be a protected claim under our rules. This is because:   

• FSCS only has the powers provided to it under the Financial Services and Markets Act 2000 (FSMA) and can only pay compensation in accordance with the COMP rules which are set by the FCA. There is no general power under FSMA or the COMP rules for FSCS to fund the continuing costs of running an insolvent SIPP provider.
• Under FSMA, FSCS must consider: 
  • Whether a customer has a claim against a firm which they could have successfully sued the firm for in court (had it not become insolvent); and 
  • The additional requirements in the COMP rules such as whether a customer is eligible, whether the claim is connected to a regulated activity and the limits on the amount of compensation FSCS can pay. 
• 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.  
• FSCS also does not consider that the damages a court would award in relation to Hartley’s alleged failings would include the Exit and Administration Charge, because there isn’t a close enough link between the actions of the firm and the proposed charge.  

This means that FSCS cannot be satisfied that the requirement for a protected claim in the COMP rules has been met.  

We understand this will not be what Hartley’s customers will have been hoping to hear. If we have any further updates, we will publish them on this page. 

Will FSCS’s position change if Hartley enters liquidation? 

If Hartley is placed into liquidation, either compulsory or voluntary, FSCS does not consider this will change anything or give rise to protected claims in relation to the Exit and Administration Charge.  

We also understand that in the event of a liquidation the SIPP schemes might be deregistered by HMRC, which would trigger a tax charge for individual customers. FSCS would not be able to pay compensation for these costs either, for the same reasons set out above.  

We have set out a more detailed analysis of the current position for those who wish to understand more about FSCS's rules and how we have applied them. This is available here (pdf 0.2MB).

25 Nov, 2022

We’re aware of a recent communication sent to members of the pension schemes – administered by Hartley – by Tony Flanagan, a director of Hartley and the director of the companies that act as trustee of the Hartley SIPPs.

We are also aware that the FCA has issued a statement on its website.

We can’t comment on those discussions between the firm and FCA or Joint Administrators. We are still working closely with the joint administrators to understand whether there are any protected claims that would allow us to pay compensation. At this time, we are not open to claims against Hartley Pensions.

If you have a claim with us against a different authorised firm (i.e., a financial adviser relating to a product within a Hartley Pensions SIPP, or a SIPP which transferred to Hartley following the original provider’s failure) we will continue to process that claim.