Upheld: delays in account setup and fund transfer; administrative failures; failure to respond to third-party concerns complaint against Flagstone Group LTD trading as Flagstone
Financial Ombudsman decision DRN-6335607 of 2026-05-13T00:00:00+00:00. delays in account setup and fund transfer; administrative failures; failure to respond to third-party concerns complaint against Flagstone Group LTD trading as Flagstone. Outcome: Upheld.
Decision detail
| Reference | DRN-6335607 |
|---|---|
| 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; administrative failures; failure to respond to third-party concerns |
| Outcome | Upheld |
| Remedy | Flagstone must: (1) calculate the notional value of Mr C's pension had funds been invested on 29 January 2025 using the actual savings accounts Mr C opened in May 2025; (2) subtract the current pension value from the notional value to determine loss; (3) pay the loss amount into the pension plan if possible, allowing for charges and tax relief, or as a lump sum with 15% notional tax reduction if pension payment not possible; (4) pay 8% simple interest per year from the date of final decision until settlement (if not settled within 28 days); (5) pay £400 compensation for distress and inconvenience (already offered); (6) provide clear calculation details to Mr C. |
Summary
Mr C complained about delays in transferring his SIPP funds to Flagstone, which took approximately four months to set up accounts and a further two months to resolve account naming issues, preventing investment until May 2025. Flagstone offered £400 compensation but Mr C sought additional compensation for lost interest. The ombudsman found Flagstone caused avoidable delays through: failing to clearly explain the application process, failing to pass information received on 7 January 2025 to the correct team despite acknowledging receipt, and failing to promptly respond to the SIPP administrator's concerns about account setup raised in December 2024. The ombudsman determined the account could have been ready by 29 January 2025 when Mr C's funds became available for transfer. Flagstone was ordered to carry out a loss assessment based on notional investment from 29 January 2025, pay any loss amount into the pension or as a lump sum with tax adjustment, pay 8% interest from the decision date, and maintain the £400 compensation for distress and inconvenience.
The Ombudsman's reasoning
The ombudsman found that Flagstone caused avoidable delays through: (1) failing to clearly explain the application process when Mrs C first contacted them, causing confusion about who should complete which sections; (2) failing to pass the information received on 7 January 2025 to the correct team despite acknowledging receipt; and (3) failing to respond promptly to the SIPP administrator's concerns about account naming and trustee requirements raised in early December 2024. While Flagstone had regulatory compliance obligations, these avoidable delays meant the account could have been set up by 29 January 2025 when Mr C's funds became available for transfer. The ombudsman rejected Flagstone's arguments that the delays were caused by third parties, finding that Flagstone should have engaged with the SIPP administrator earlier to resolve the account setup issues. The loss assessment should be based on notional investment from 29 January 2025 using the actual savings accounts Mr C opened in May 2025 as a reasonable benchmark, as interest rate differences between January and May 2025 were minimal.
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