“We are also entirely sympathetic to the investors who may have to fund the resolution but unfortunately there is currently no alternative available.”
FSCS U-turn
Yesterday (January 29), the Financial Services Compensation Scheme U-turned on a previous decision and said it would now protect Hartley Sipp members by paying compensation for the exit and administration charge.
In December, as reported by FT Adviser, the FSCS said it did not have enough evidence and said the EAC would not be protected under its rules.
The EAC is intended to cover costs, including the costs for customers to transfer to other regulated companies where possible, until Hartley’s administration is concluded.
UHY Hacker Young has applied to court to ratify an EAC the administrators would make against the assets clients hold within their Sipps.
This will replace the current annual management fees Sipp clients are being charged and will enable them to eventually transfer out.
The administrators have issued the court application with a hearing date set for February 29 and March 1.
FT Adviser reported last month that this charge could amount to as much as £37mn. The administrators have said this would be to cover work arranging transfers out for the 16,741 Sipp schemes.
The administrators said it will be writing to all clients shortly to provide a calculation of each client's estimated EAC.
It said total estimated EAC constitutes approximately 2.8 per cent of the total assets under administration.
amy.ausin@ft.com
