The Pensions Ombudsman (TPO) has upheld a complaint against James Hay Partnership after finding that a member was subjected to an avoidable transfer delay.

Mr T complained that the provider had caused an undue and avoidable delay as he sought a transfer from the Tenco Executive Pension Scheme to a new provider in order to invest in the stock markets following the Brexit referendum result on 23 June 2016.

He had cash and stocks with Barclays Stockbrokers (BSB) in the self-administered scheme but emailed James Hay to begin the transfer on 24 March 2016 after BSB notified him that it would be closing its pension trader accounts from 30 June 2016.

Having initially told James Hay that the transfer must be made before this closure, Mr T told the provider, on 10 June, he wanted the transfer to be completed before the 23 June referendum.

This was not achieved, with James Hay receiving the cash element of his portfolio on 11 July, with his £250,000 in cash being transferred to the new Hargreaves Lansdown self-invested personal pension plan on 19 August 2016.

Six of his lines of stock were transferred on 26 August 2016, before the final line was transferred in specie on 3 October 2016.

This led Mr T to complain to James Hay that he had intended to invest in the FTSE 100 Index if the referendum result had indicated that the UK would leave the European Union in order to take advantage of the index’s sharp fall and subsequent recovery.

James Hay responded to the complaint with a claim that it had carried out its duties in a satisfactory manner within acceptable timescales, though it accepted that there were two exceptions relating to miscommunication.

In 2018, adjudicators and the ombudsman both concluded that there had been maladministration on the part of James Hay, stating that, before 11 July, there were a total of 46 working days where there was no evidence that James Hay actively sought to progress matters and effect the transfer.

Consequently, TPO stated that “within 28 days of this determination, James Hay shall pay Mr T £2,000 in recognition of the very significant distress and inconvenience caused by its maladministration”.

However, Mr T appealed to the High Court, arguing that the compensation had not been significant enough considering the profit he stood to make due to the FTSE 100 dropping to approximately 5,700 after the referendum vote before rising to around 6,800 less than two weeks later.

The High Court remitted the decision back to the ombudsman, stating that the ombudsman should “identify the date by which the money should, on the basis of James Hay acting without maladministration, have arrived”, before considering whether what Mr T submitted “is in part or whole based on hindsight”.

The ombudsman concluded that the money should have arrived by 23 June 2016 and that Mr T would have invested the full amount of cash in the FTSE 100 Index immediately after the referendum vote.

Consequently, TPO has now instructed James Hay to compensate Mr T for his lost opportunity to make a profit in the aftermath of the Brexit referendum by paying £43,700 plus interest into his new pension plan.

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