‘Misleading’ pension firm with 16,000 customers slammed after collapse into administration | Personal Finance | Finance

A “misleading” pension firm with more than 16,000 customers has been slammed by the Financial Conduct Authority (FCA) after collapsing into administration.

Hartley Pensions was a self-invested personal pension (SIPP) operator authorised and regulated by the FCA, and it also provided administration for a small number of self-administered schemes (SSAS), regulated by The Pensions Regulator. According to Administrators UHY Hacker Young, the firm operates 16,666 SIPPs and 360 SASSs, and while it runs operations of these, it doesn’t have custody of customer assets, which are held by separate trustee entities.

The firm entered administration in 2022 at the request of the FCA, and at the time, it was already subject to several FCA restrictions due to serious operational, financial and regulatory issues.

The FCA has now announced it is taking enforcement action against the firm and an unnamed individual after alleging it “repeatedly” provided it with “false and misleading information”.

The regulator also claimed the firm “improperly” withdrew and invested customers’ pension funds without their consent, with the aim of benefiting an individual at the firm.

This individual then “dishonestly” used these funds to obtain money for a company they owned and “misled the FCA to conceal this misconduct”.

The FCA said: “The FCA alleges that Hartley provided it with false and misleading information and improperly withdrew and invested substantial amounts of customers’ pension funds, without their consent, to benefit an individual at the firm.

“The FCA alleges that the individual dishonestly used the pension funds and made false representations to obtain money for a company that they owned. They then misled the FCA to conceal this misconduct.”

The FCA has now issued warning notices to Hartley Pensions and the unnamed individual, both of which allege that misconduct resulted from “the individual putting their own interests above those of pension holders”.

The warning notices are not the regulator’s final decisions, and the firm has the right to make representations to the Regulatory Decisions Committee, which will decide on the appropriate action.

In the event that the FCA makes final decisions, the regulator said it intends to make its findings public “at the appropriate point”, including any proposed sanctions.

In a summary explaining why it gave Hartley Pensions a warning notice, the FCA said: “The FCA considers that during the period from 11 December to June 15, 2022 (the “Relevant Period”), Hartley breached Principle 1 (Integrity); Principle 3 (Management and Control); and Principle 6 (Customers’ Interests) of the FCA’s Principles for Business.

“In particular, the FCA considers that, during the Relevant Period: in order to prevent the FCA from identifying the dishonest misconduct of an individual at Hartley (the “Individual”), the Individual caused Hartley to dishonestly provide false and misleading information to the FCA repeatedly, including in response to, and in purported compliance with, statutory information requirements.

“Hartley, through the Individual failing to meet the ethical standards expected of financial services professionals, improperly withdrew and invested very substantial amounts of pension funds, without following its due diligence process and without pension holders’ consent, for the Individual’s financial benefit;

“Harley acted recklessly by failing to communicate with pension holders about the investments and by failing to seek to manage clear and acute conflicts of interest that existed.

“The FCA considers that Hartley’s misconduct resulted from the Individual improperly putting their own interests above those of pension holders.”