I lost £132,000 of my pension to ‘toxic’ bond
G.J. writes: In 2018, I took £115,000 out of my Jaguar Land Rover pension fund and put the rest into a Sipp with wealth managers Huntsman Hawkes. They asked the Ascentric platform firm to put just over £132,000 into a corporate bond. Huntsman Hawkes collapsed, and my replacement Sipp firm said they wanted nothing to do with the corporate bond as they felt it was toxic. The bonds have since been delisted, and I may not get my money back.
THIS has been one of my messiest enquiries for a long time, with a cast list that threatened to become as big as a telephone directory, so please excuse me if I compress some of the complicated details.
Switching away from a defined benefit pension scheme is hardly ever a good idea, but you wanted a lump sum for family reasons, and transferring to a Sipp let you draw this. You consulted The Advisor Partnership Limited, a firm on the Financial Conduct Authority’s public register, and it introduced you to Huntsman Hawkes Limited, also FCA-approved. However, in 2020, The Advisor Partnership was compulsorily struck off by Companies House.
Huntsman Hawkes reviewed your finances and recommended a Sipp administered by Ascentric Platform, but with investments managed by yet another company, Clear Capital Management LLP.
Oddly though, it was Huntsman Hawkes – not Clear Capital Management – that instructed Ascentric to put a huge slice of your pension money into loan notes issued by Corporate Finance Bonds Limited, listed at the time on the stock market in Dublin but since delisted.
In August 2019, Huntsman Hawkes collapsed into administration, and in the same month Clear Capital Management was revealed to have been the target of an FCA investigation and it halted almost all activity before being compulsorily struck off by Companies House in June this year. In fact, only Ascentric, which simply carried out administration work, has emerged unscathed.
So where does this leave your loan notes? These have been swallowed up into Recovery Notes from yet another firm, Heritage Corporate Finance, a specialist business that manages the orderly winding up of financial instruments that go wrong. And its boss, Marc Ainscough, told me that your loan notes ‘were not suitable for retail investors and were not made available to them’.
However, Martin Vaughan, who ran Clear Capital Management, explained that he only drew up ‘model portfolios’ containing a range of different investments. He told me: ‘The suitability of the model portfolios for each individual client was assessed and determined by the financial adviser.’
That financial adviser was Dean Foreman of Huntsman Hawkes. But he told me he believed the model portfolios held ‘standard assets’ suitable for ordinary investors, and what went into those portfolios was for Clear Capital Management to decide. In short, he seems to have looked at the headline label, and not at what went into the portfolio, heavily loaded with corporate IOUs.
The result is as if Clear Capital Management manufactured a gun, but it was Huntsman Hawkes that pulled the trigger; you were just the victim, trusting the professionals.
Your loan notes may still pay something, though this will not be known at least until next year, but it is likely you have lost more than the Financial Services Compensation Scheme ceiling of £85,000.
Your advice firm was Huntsman Hawkes, so I asked director Dean Foreman to say which insurer provided its professional indemnity cover, as this might benefit you. He replied: ‘I’m afraid I do not recall who our PI insurance was with.’ It all happened two years ago, he added.
It is likely that FCA records hold the answer for both Huntsman Hawkes and Clear Capital Management, so I asked the regulator for details. That was in May, five months ago. Answers were promised but have never arrived.
Your own next stop has to be the compensation scheme, which might pry open the FCA’s records, failing which you have grounds for a complaint against the FCA itself.