Hartley’s SIPP Clients Can Now Begin Transfers to Morgan Lloyd

Thousands of Hartley’s pension clients who have been trapped for over two years in Hartley’s Self-Invested Personal Pensions (Sipps) can finally start transferring their pensions to Morgan Lloyd. This move follows Morgan Lloyd’s appointment by Hartley’s administrators as the new nominated operator.

Morgan Lloyd, a pensions management and administration business, has been selected to handle these transfers after thorough due diligence conducted by administrators UHY Hacker Young in collaboration with the Financial Conduct Authority (FCA).

Anthony Carty, director of Morgan Lloyd’s parent company, Clifton Asset Management, commented that this appointment “marks a new chapter” for Hartley clients.

Issue background

The problems for Hartley’s clients began in 2022 when Hartley Pensions announced that administrators were being brought in to manage the company’s affairs. Since then, clients have faced significant challenges, including barriers to transferring out and mounting administration costs.

Morgan Lloyd’s Preparedness

Morgan Lloyd’s proprietary technology has been designed to handle large-scale operations, ensuring that the company is ready to support the transfer process effectively. Anthony Carty emphasized the company’s commitment to providing stability and reassurance to Hartley Sipp clients during this transition. He expressed confidence in his team’s ability to restore integrity to the affected pension schemes.

The Transfer Process

To streamline the transfer process, Hartley Sipp clients have been informed by UHY Hacker Young that they will be moved out in tranches. The Financial Services Compensation Scheme (FSCS) has also confirmed that funding is available to cover the cost of these transfers.

Clients are not obligated to transfer to Morgan Lloyd. They have the option to choose another Sipp provider if they prefer which is flexible approach.  However, any assets that have substantial issues impacting the scheme’s viability or are under sanctions from HMRC will not be moved to Morgan Lloyd. This includes clients who have investments tied up in controversial assets like storage pods.

Challenges Ahead

John Dowding, technical director at Morgan Lloyd, acknowledged the complexities and challenges ahead but assured clients that their priority is to make the transition as smooth as possible while maintaining high service standards. He emphasized ongoing cooperation with administrators and relevant stakeholders to achieve this goal.

Expected Timeline

There is no fixed timeline for when the transfers will begin, but it is anticipated that documents will be sent to clients moving to Morgan Lloyd by mid to late July 2024. The transfer process involves several steps:

1. Sending out documents to clients, expected to continue until September 2024.
2. Clients returning the documents within 45 days.
3. Reconciling any queries on the documents.
4. Commencing transfers once documents are agreed upon or reconciled.

Hartley Pensions’ Journey

In July 2022, Hartley Pensions entered administration following a request from the Financial Conduct Authority (FCA). At that time, director Tony Flanagan warned clients that the value of their pensions might be significantly impacted due to administration and liquidation costs. His warning, though initially dismissed, proved to be accurate as clients faced considerable administration costs and obstacles in accessing their funds over the following two years.

FSCS Intervention

In February 2024, the FSCS stepped in, providing funding to enable Hartley Pensions’ administrators to start the exit strategy and initiate transfers for thousands of customers. This funding, deposited into a trust account, ensures that Sipp members are not charged the exit and administration fees initially proposed.

The FSCS declared Hartley Pensions in default, allowing it to pay out compensation. While this declaration enabled compensation for exit charges, individual claims against Hartley Pensions have not been processed by the FSCS.

Changing Decisions

At the beginning of the year, the FSCS reversed its earlier stance and decided to protect Hartley Sipp members by compensating them for the exit and administration charges. Initially, in December, the FSCS had stated that it lacked sufficient evidence to protect these charges under its rules, but it later changed its decision.

The exit and administration charge is intended to cover costs, including those for transferring clients to other regulated companies until Hartley’s administration concludes. This charge could total as much as £37 million, covering the work required to arrange transfers for the 16,741 Sipp schemes.

Conclusion

The transfer of Hartley’s Sipps to Morgan Lloyd marks a significant step forward for clients who have endured a prolonged period of uncertainty. With the backing of the FSCS and the commitment of Morgan Lloyd, there is renewed hope that the affected clients will finally find stability and security in their pension schemes.