Hartley Pensions: Acquiring Failure Through Expansion..

Hartley Pensions Update: FCA Warnings and Administration Insights

Recent developments at Hartley Pensions have drawn attention from the Financial Conduct Authority (FCA), particularly regarding misleading information in a message from a former director. This communication, which occurred amidst the firm's move into administration in 2022, was released without approval from the joint administrators or the FCA. Highlighting concerns over this, the FCA specifically pointed out "factual inaccuracies" that could mislead investors, especially regarding the risk of their funds being used in the administration process.

Adding to this, the FCA has reassured Hartley's clients that their investments in various pension schemes and alternative options through the company's SIPPs remain secure, as they are not directly invested in Hartley itself. This clarification is crucial given the concerns arising from the company's wind-down process. The administration of Hartley, now in the hands of Peter Kubik and Brian Johnson of UHY Hacker Young, is expected to be a lengthy and costly affair, estimated to take at least 12 months and cost approximately £2.5 million. This situation stems from a series of regulatory actions and voluntary requirements Hartley faced due to significant operational and financial issues, eventually leading to the firm's insolvency and subsequent administration.

Hartley Pensions, earlier known as Hartley Lifetime Pensions Limited, joined the Wilton Group in 2016. Founded by a Director of Hartley Pensions, the Wilton Group's range of financial services activities was instrumental in the firm's early growth as a Self-Invested Personal Pension (SIPP) operator.

 

Expansion Through Acquisitions

In recent years, Hartley Pensions undertook a significant expansion by acquiring the SIPP clients of several providers that had faced challenges. These acquisitions include notable names like the following:

Guardian (GPC)

Berkeley Burke

Greyfriars SIPP

Lifetime SIPP

Guinness Mahon

The acquisition of these firms’ clients introduced new complexities to the firm's operations. EACH OF THE CLIENT BOOKS CONTAINED HUNDREDS OF CLIENTS WHOSE SIPPS HELD IMPAIRED OR VALUELESS ASSETS and/or were due compensation or, were in the process of making a claim.

Hartley was left administering SIPPs in a climate of confusion and dispute, with extreme administration costs. Clients were understandably disinclined to pay fees to these SIPPs when their pensions were valueless and it later became clear that Hartley had fallen foul to the same negligence in terms of toxic investments that brought down the pension providers whose clients it had acquired.

For those affected, understanding the losses relating to the failed investments and their implications, is crucial, particularly in light of potential claims and compensation.

 

Wide Range of Connections: Detailed Analysis of Investments and IFAs Involved with Hartley Pensions:

In the complex landscape of Hartley Pensions, a detailed look at the investments involved and the Independent Financial Advisors (IFAs) associated with them, is crucial. This section provides an overview of these elements, highlighting their significance in the broader context of Hartley Pensions' operations. Hartley Pensions was linked to Athena Wealth (a trading style of Hamilton Rose Wealth Management), Blackstar Wealth Management, Omega Financial Solutions (linked to Brunel & Lewis), Pension Advice Specialist: 792927 Involved in Dubai transfers, Douglas Baillie Ltd and Foreman Financial Services.

Hartley Pensions was responsible for administering a broad range of investments, each varying in nature and complexity. The failed investments have been a focal point in understanding the firm's operational dynamics and the challenges it faced.

Independent Financial Advisors (IFAs) Associated with Hartley Pensions:

Hartley's financial industry connections included a wide range of entities as already mentioned. This diversity, coupled with connections to several Independent Financial Advisors (IFAs), that which we expand on below, further complicated the firm's landscape.

The involvement of these IFAs who signed off many of the toxic investments, included the following:

Douglas Baillie

PFS (Personal Financial Services)

Investaco

Furness Financial

Copia Wealth Management

The London Trading Company

Hamilton Rose

Blackstar Wealth

Wellington Court Financial Services

Assured Review IFA

The engagement of these financial advisors who introduced clients to Hartley Pensions and their role in directing investment towards the aforementioned unsuitable assets, are central to explaining the challenges faced by the firm and its clients.

Overview of the key failed investments associated with Hartley Pensions:

Lanner Car Parks

ABC Bonds

The Resort Group

Harlequin Property

Invest US

Gas Australian Farmland

Store First

Aigo Funds

Ethical Forestry

Harmony Bay

Dolphin Capital (Dolphin Trust)

Lateral Eco Parks

Walsall Burial Park

Salinas Sea Resort

Park First

Rimondi Grand

Urban Student Property Fund

Olmsted Bond

Portfolio Six

The varied but failed financial products that Hartley Pensions (and/or its predecessors) allowed clients to hold, range from real estate and land developments, through mini-bonds (loan instruments to companies), to various financial-derivative products. Understanding the nature and implications of these investments is crucial for anyone affected by Hartley Pensions' own recent demise.

 

Escalating Challenges and Regulatory Response:

FCA Restrictions

In March 2022, the Financial Conduct Authority (FCA) imposed significant restrictions on Hartley Pensions, limiting its ability to accept new clients and conduct new business without explicit regulatory authorisation.

In a significant regulatory move, Hartley Pensions agreed to a "Voluntary Request (‘VREQ’)" to the Financial Conduct Authority (FCA) on July 11th, seeking to impose specific restrictions on its operations. The firm agreed to measures to prevent it from accepting ongoing contributions into the SIPPs and SSAS it managed.

Responding to this agreement, the FCA implemented the requirements. The FCA's decision was influenced by several serious operational and regulatory challenges that Hartley Pensions was addressing. In their statement, the FCA noted, "The requirements have been imposed due to a number of serious operational and regulatory issues that the firm are attempting to deal with and is intended to protect all of the firm's customers."

This action was not an isolated incident but part of a series of restrictions placed on Hartley Pensions by the FCA. These measures underscore the regulatory body's commitment to safeguarding the interests of the firm's customers amidst its ongoing challenges.

Administration and Investigation:

By July 2022, Hartley Pensions faced a terminal juncture when it was placed in administration on July 29th, by directors, with the FCA's consent. This led to the appointment of Peter Kubik and Brian Johnson of UHY Hacker Young LLP as joint administrators. Simultaneously, the firm was under investigation from the FCA. This followed the Asset Restriction and Client Funds requirements which were placed on the firm in February 2022.

 

Sale Negotiations and Miscommunications:

As of November 2022, significant developments unfolded regarding Hartley Pensions, particularly concerning the sale of its self-administered pensions scheme client book. This development was confirmed by the firm's administrators, indicating a substantial change in the firm’s operations.

 

Agreed Sale in Principle:

The administrators, UHY Hacker Young Chartered Accountants, communicated to all SSAS clients of Hartley Pensions, confirming that the sale of the client book to a new preferred operator had been agreed upon in principle. However, they noted that the completion of this sale would not occur before the first quarter of 2023. This delay was attributed to logistical challenges involved in the transferring of theSSAS book containing 360 schemes comprised of 947 clients. Clients were given the option to opt-out, but with potential additional charges.

Addressing Concerns Regarding a Director's Communication:

In a communication addressed on November 23, 2022, a director of Hartley Pensions sent an email to SIPP clients that raised some serious issues. The director's email suggested that the FCA's actions had jeopardised the value of SIPP clients' pension funds. The administrators, however, clarified that this communication was not sanctioned by them and contained inaccuracies.

 

In their response, the joint administrators described the email as "drastically inaccurate in many ways". They reassured that the sale of the entire SSAS book, already agreed upon in principle, would not result in any additional charges being applied to client assets. This cost would be covered by the consideration received from the sale to the preferred operator. They emphasised, "As such, we are mindful that Mr. Flanagan's inaccurate statement may have caused significant unnecessary concerns for SSAS clients."

 

Further, they stated, "The communication contains factual inaccuracies which may have caused customers concern."

This situation highlights the problems that can be caused by inaccurate and unclear communication by directors in sensitive financial matters, especially when client are in a position of loss and futures are at stake.

Clients Transferred from Hartley Pensions

Administrators for Hartley Pensions Limited, a major provider of Self-Invested Personal Pensions (SIPPs), have transferred hundreds of clients out of the firm, with further transfers ongoing. The firm entered administration in July 2022 after acquiring several other insolvent SIPP providers between 2018 and 2021. Many of the acquired pensions were impaired by high-risk, unregulated investments.

UHY Hacker Young, the administrators, have attributed delays in the administration process to the nature of these 'toxic assets,' Hartley's poor track record, and the lack of integration of the acquired businesses. Clients are being transferred to various operators, but the administrators have cautioned that resolving all client accounts could take up to a year, as reported in the financial press on 7 January 2025. [source Professional Advisor]

CP Financial Claims: Expert Support in Complex Situations

Given the intricate nature of these claims and the involvement of various IFAs, pension providers and investments, CP Financial Claims is well-positioned to offer expert advice and support.

Whether it's understanding the implications of specific investments, navigating the complexities introduced by different IFAs, or exploring potential compensation claims, our team is here to provide clarity and assistance.

How We Can Help

• Comprehensive Reviews: We conduct thorough reviews of your investments and the advice received from IFAs.
• Guidance on Claims: If you're affected by investments made through Hartley Pensions, we can guide you on potential claims and guide you through making them if you wish to do so.
• Streamlined Processes: Our processes are designed to simplify and clarify the complexities you may face.

Act Now: Proactive Support for Affected Clients

If you've been involved with Hartley Pensions or any of the associated failed pension providers, or in fact any of the firms mentioned above, it's crucial to review your financial position and get in touch. Our experts at CP Financial Claims are equipped to assess your case, helping you understand your rights and options for compensation.

Please fill out the form and submit your contact details for a free, no-obligation chat.