The administrators of Hartley Pensions have criticised a law firm for charging members to help them transfer their Sipp.
In a letter to clients, seen by FT Adviser, UHY Hacker Young alleged that FS Legal have requested that clients pay them £1,000 to assist with closing their Sipp.
The administrators said that FS Legal have stated there will be people with empty/toxic Sipps that will need to be transferred, and the fees will be more expensive in the long run.
UHY Hacker Young has now told Hartley clients it is not necessary to instruct FS Legal or anyone else in order to prevent Sipps with impaired or toxic assets from being transferred.
However, FS Legal has hit back, saying clients do not have to use its services, but those who do are aware of the charge.
A spokesperson for FS Legal Solicitors told FT Adviser: “We already act for approximately 550 Sipp holders who have instructed us to seek closure of their Sipps. We have been asked to provide terms to new people who want the same type of assistance. This we have done.
“No Sipp member is obligated to use our services and those who do so, know there is a charge. Considering the complexity of the closure and each Sipp having different holdings, what we offer is very reasonable.
“If UHY delivers everything they say then we will be delighted. It will bring this debacle to a close. The problem is that many Sipp holders have little faith in UHY’s ability to deliver, hence our being asked to provide assistance.”
Indeed, FS Legal has written to Hartley pensioners, defending its fees.
The letter, seen by FT Adviser, states: "No one is obligated to instruct us. Any instructions are given to us in full knowledge there would be a charge.
"We started with a large number of Financial Ombudsman Service claims to Hartley Pensions Limited, way back before they went into administration in 2022. We raised the closure of our clients' Sipps with UHY immediately, as the administration occurred in late 2022.
"Our involvement in the Part 8 proceedings (on behalf of the Representative Respondents) led to all Sipp members avoiding a £35m+ charge for exit (when the FSCS stepped in)."
Impaired or toxic assets
In its letter, UHY Hacker Young explained it was looking into whether it can disinvest impaired or toxic assets from Sipps, with the agreement of the client and HMRC, to avoid these being transferred.
It said: “The position is complicated and lengthy, but this is the outcome we are seeking to achieve.”
For Sipps containing only impaired or toxic assets, this would mean the Sipp could be closed.
But for Sipps containing both liquid or standard assets and impaired or toxic assets the approach depends on whether or not the Sipp is in drawdown.
