Upheld: delays in account setup and fund transfer; failure to provide clear process guidance; failure to pass information to correct department; failure to engage with third-party administrator concerns complaint against Flagstone Group LTD trading as Flagstone
Financial Ombudsman decision DRN-6335595 of 2026-05-13T00:00:00+00:00. delays in account setup and fund transfer; failure to provide clear process guidance; failure to pass information to correct department; failure to engage with third-party administrator concerns complaint against Flagstone Group LTD trading as Flagstone. Outcome: Upheld.
Decision detail
| Reference | DRN-6335595 |
|---|---|
| Decision date | 2026-05-13T00:00:00+00:00 |
| Firm | Flagstone Group LTD trading as Flagstone |
| Product | pension (SIPP - Self-Invested Personal Pension) |
| Claim type | delays in account setup and fund transfer; failure to provide clear process guidance; failure to pass information to correct department; failure to engage with third-party administrator concerns |
| Outcome | Upheld |
| Remedy | Flagstone must calculate loss by determining notional value of pension if funds invested by 29 January 2025 using the actual accounts Mrs C opened in May 2025 as benchmark, then subtract current pension value. If loss exists, pay into pension plan if possible (accounting for charges and tax relief), or as lump sum to Mrs C with 15% notional tax reduction if pension payment not possible. Pay 8% simple interest per year from final decision date if not settled within 28 days. Pay £400 compensation for distress and inconvenience (already offered by Flagstone). |
Summary
Mrs C complained about delays in transferring her SIPP funds to Flagstone, claiming financial loss from missed investment opportunities. She applied in November 2024, but the account was not opened until 26 February 2025, with funds not transferred until May 2025 due to structural issues. The ombudsman found Flagstone caused avoidable delays by: failing to clearly explain the application process requiring SIPP administrator involvement; failing to pass information provided on 7 January 2025 to the correct team despite acknowledging receipt; and failing to engage with administrator concerns about account structure raised in December 2024. The ombudsman concluded the account could have been ready by 29 January 2025 when funds became available. Flagstone was ordered to calculate any loss based on notional investment from 29 January 2025 and pay £400 compensation for distress, plus 8% interest if not settled within 28 days.
The Ombudsman's reasoning
The ombudsman found Flagstone caused avoidable delays through: (1) failing to clearly explain the application process when Mrs C first contacted it on 20 November 2024, which should have involved the SIPP administrator directly rather than Mrs C acting as intermediary; (2) failing to pass Mrs C's information provided on 7 January 2025 to the correct onboarding team despite acknowledging receipt and confirming it would do so; and (3) failing to engage with the SIPP administrator's concerns raised in December 2024 about account structure before funds became available for transfer. The ombudsman concluded that accounting for these avoidable delays (approximately one month for the January information plus one-third of initial application delay), Flagstone could have set up the account ready for investment by 29 January 2025 when funds became available, while still meeting regulatory requirements. The ombudsman rejected Flagstone's arguments that regulatory compliance prevented earlier setup, finding instead that the delays were avoidable within a compliant framework.
How this compares
| Group | Decisions | Uphold rate |
|---|---|---|
| Flagstone Group LTD trading as Flagstone, all decisions | 2 | 100% |
Source
Read the original decision on the Financial Ombudsman Service website