The Financial Conduct Authority has reassured Hartley Pensions clients following a letter sent by the joint administrators over the unauthorised movement of monies from their SIPPs by Hartley.

The letter from the joint administrators, UHY Hacker Young, sent yesterday stated that the monies were “subsequently paid back” before Hartley entered administration.

The FCA said it understands the monies in question are the subject of a civil litigation case in the Isle of Man being brought by a private individual. The regulator said that the administrators have confirmed they are ring-fencing the monies whilst this is being undertaken, but that partial transfers for uncrystallised clients may be possible. 

The regulator reassured Hartley clients that it has been conducting an enforcement investigation into Hartley Pensions since 2022, but added that it was not able to provide any further details yet.

The FCA said: “We know the joint administrators’ letter will be worrying for Hartley clients who have received this communication. We also recognise that the length of time the administration process is taking is causing distress to customers. We are working with the joint administrators to ensure the process is carried out as quickly and efficiently as possible.

“If you did not receive the above-mentioned communication, then, the FCA understands, your account was not impacted by the ongoing civil litigation and will continue to progress in line with the joint administrators’ timeline.”

Hartley clients have already begun to be transferred out, with more transfers expected to come over the next few months.

Administrators UHY Hacker Young appointed Morgan Lloyd, a subsidiary of Clifton Asset Management, to be the nominated operator and receive transfers from the Hartley SIPP business in June. Client also have the option to transfer to other providers.

The Financial Services Compensation Scheme (FSCS) declared SIPP and SSAS provider Hartley Pensions in default in February 2024.

Hartley Pensions went into administration in July 2022.

In January 2024 the FSCS confirmed that it will pay the exit and administration charge (EAC) that the joint administrators propose to levy on Hartley Pensions Limited (HPL) customers, despite earlier saying that it could not do this.

The U-turn came about after the FSCS, “obtained and considered further evidence,” it said.

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. The costs are likely to be around £36m, according to UHY Hacker Young.

Hartley Pensions went into administration in 2022 after several regulatory interventions and a failure to find a buyer. An estimated 16,000 clients were hit by the collapse. It had been subject to a number of FCA requirements in early 2022 due to, “serious operational, financial and regulatory issues.”

In previous years, Hartley Pensions had acquired the client books of several failed SIPP providers. It bought the Guinness Mahon book in February 2020 after the firm collapsed. The deal meant the transfer of 4,000 SIPPs previously administered by GMTC which suffered a string of problems and legal actions from unhappy clients.

Other SIPP books the firm acquired in recent years included GPC, Berkeley Burke SIPP and Greyfriars AM.