Not upheld: Fairness of ongoing SIPP administration fees; alleged unfair treatment and breach of Consumer Duty complaint against Alltrust Services Limited (trading as Alltrust)

Decision detail

Summary

Mr O complained about annual administration fees charged by Alltrust for his SIPP, which holds an illiquid TRG investment that he was advised to make by a regulated financial adviser. After Rowanmoor (the original SIPP operator) entered administration, Alltrust took over administration of the SIPP in 2023. Although Mr O recovered FSCS compensation for the unsuitable advice and Rowanmoor's failures, he could not close the SIPP or transfer it because the TRG asset could not be removed without breaching HMRC pension rules. Mr O argued that Alltrust should suspend fees and refund past fees, as the investment was unsuitable and the ongoing charges were depleting his remaining pension balance. The ombudsman found that Alltrust was not responsible for the unsuitable investment and was entitled to continue charging for administering the SIPP while it remained open and held assets, as regulatory requirements mandated ongoing administration. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged Mr O's difficult position but found that Alltrust was not responsible for the unsuitable investment or the SIPP being set up. Although FSCS found the adviser and Rowanmoor at fault, the same was not true of Alltrust, which stepped into Rowanmoor's shoes as replacement operator without accepting liability for prior failures. The ombudsman found that Alltrust must continue to administer the SIPP while it holds assets and remains open, and is entitled to charge for this work. The regulatory requirements around pension assets mean Alltrust cannot simply write off the TRG investment as having nil value to allow closure, as this would breach HMRC rules and potentially expose Mr O to unauthorised payment charges. The ombudsman found no evidence that Alltrust was treating Mr O unfairly compared to other customers or breaching the Consumer Duty, as the SIPP must remain open and administered while it holds assets.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website