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  • FIRST POST
    • zAndy1
    • By zAndy1 10th Jan 20, 2:52 PM
    • 148Posts
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    zAndy1
    Potential FSCS compensation for someone that's died / messy situation with illiquid pension
    • #1
    • 10th Jan 20, 2:52 PM
    Potential FSCS compensation for someone that's died / messy situation with illiquid pension 10th Jan 20 at 2:52 PM
    Hi,
    I'm after some advice as to the best way to proceed with this. My brother passed away just over a year ago, solicitors have been dealing with the estate and basically with the exception of one old pension fund that my daughter was named as beneficiary for everything from my brother's estate has so far gone to his daughter. This is despite the fact his daughter never wanted to know her dad and ignored his many attempts to contact her or even worse replied back with insults causing my brother a great deal of stress and emotional turmoil over many years. Anyway I'll cut to the chase. My brother transferred a couple of his workplace pension funds to the value of approx 90k to a SIPP managed by Avalon investment services in 2014. The instructors were Abana LDA as far as I can tell and the money was invested in some funds that subsequently became illiquid and now have no value. In 2015 Abana instructed a company called Complete Compliance Solutions to investigate the suitability of advice it gave to UK consumers and in 2016 complete compliance solutions reached a decision that redress was due of approx 103000 , that money has never been paid to this day as far as I can tell and I am currently in the process of trying to make sure that compensation is paid and have contacted Abana to that effect who are looking into it.
    Where things get complicated is this, my daughter recently had a letter from Rowanmoor who now have ownership of the Avalon SIPP having taken it over from Embark Investment Services who took it over from Avalon Investment Services to inform her that she was the sole named beneficiary of the Avalon SIPP my brother had set up but that the solicitors dealing with the estate had requested all benefits were paid to my brother's daughter (who don't forget never wanted to know her dad) rather than his niece who was named as sole beneficiary. We have replied that yes my daughter does want to be considered as a beneficiary and the trustees are currently looking at it however I can only assume the money that was lost in the illiquid funds to the tune of over 90k isn't in the Avalon SIPP value about to be distributed and I'm looking for advice really as to where we stand as regards who the compensation should be paid to and who is qualified to claim it. I notice that the FSCS are taking claims from clients of Avalon Investment Services having investigated them and deemed them to be guilty of misselling / poor advice. The money lost was in the Avalon SIPP that my daughter was named as sole beneficiary of however as far as I can tell any FSCS claim (if it comes to that) in this instance would need to be made by the solicitors as executor of the estate with the grant of probate and they will undoubtedly then distribute the money to my niece rather than my daughter despite the money originally being in a fund my brother had named my daughter as beneficiary for. Could I request the trustees of the Avalon SIPP to put the compensation claim in with the FSCS on behalf of my daughter as named beneficiary (should Abana not pay up) or is this going to have to come from the solicitors and what chance do we have of arguing that the money should be paid to my daughter? If Abana do admit liability and are prepared to pay where could the money be legally put under the circumstances, would it have to be paid to the solicitors?
    Sorry for the long post, it's a very messy situation as you can probably tell..

    Thanks
Page 1
    • Malthusian
    • By Malthusian 10th Jan 20, 3:29 PM
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    Malthusian
    • #2
    • 10th Jan 20, 3:29 PM
    • #2
    • 10th Jan 20, 3:29 PM
    In 2015 Abana instructed a company called Complete Compliance Solutions to investigate the suitability of advice it gave to UK consumers and in 2016 complete compliance solutions reached a decision that redress was due of approx 103000 , that money has never been paid to this day as far as I can tell and I am currently in the process of trying to make sure that compensation is paid and have contacted Abana to that effect who are looking into it.
    The executors need to make a formal complaint to Abana. If they fail to provide redress within eight weeks the executors can take the complaint to the Financial Ombudsman Service. If Abana cannot pay and goes bust they can claim up to 50,000 from the FSCS. There is a good chance that this will take years rather than months so they should not delay further.

    The review by Complete Compliance Solutions would not have been binding (unless it was forced on them by the FCA, which presumably it wasn't) so Abana is within their rights to have ignored their recommendation. It takes an award by the Financial Ombudsman to be binding.

    If the trustees pay the death benefits to your daughter, in theory she could bring a complaint to Abana as she then becomes the one who lost out. Not 100% certain on that point, but she could start the process off by making a formal complaint to Abana and seeing what happens. There's no point in your daughter doing that before the Rowanmoor trustees have made their decision on the death benefits.

    The trustees of the SIPP have absolute discretion as to where they pay the death benefits, so if they decide to pay it to the deceased's daughter, that will be that.

    Normally compensation in regard to SIPP misselling would be paid into the SIPP. If it's paid into the SIPP then distribution would be at the discretion of the trustees, same as with the money already there. Sometimes however compensation is paid directly to the individual, which would mean it would be distributed in line with his Will or intestacy rules, presumably to his daughter. Impossible to be certain which will happen.

    You need to ask the executors whether they are making a complaint to Abana about the bad advice he received. It would also be worthwhile to inform the Rowanmoor trustees why he nominated your daughter and not his. They have full discretion but it doesn't hurt to give them the background if they haven't yet made their decision. Once they have paid the money out there is no scope for challenge.
    • Marcon
    • By Marcon 10th Jan 20, 8:08 PM
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    Marcon
    • #3
    • 10th Jan 20, 8:08 PM
    • #3
    • 10th Jan 20, 8:08 PM
    It would also be worthwhile to inform the Rowanmoor trustees why he nominated your daughter and not his. They have full discretion but it doesn't hurt to give them the background if they haven't yet made their decision. Once they have paid the money out there is no scope for challenge.
    Originally posted by Malthusian
    There certainly is - usually the disappointed hopefuls only find out about the decision after the cash has been paid out. The Pensions Ombudsman's website has a number of determinations where a complaint has been upheld e.g. https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-20080.pdf

    Have a word with TPAS if you would like to chat (free of charge) to an impartial expert: http://www.pensionsadvisoryservice.org.uk
    Last edited by Marcon; 10-01-2020 at 8:15 PM.
    • Malthusian
    • By Malthusian 13th Jan 20, 2:34 PM
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    Malthusian
    • #4
    • 13th Jan 20, 2:34 PM
    • #4
    • 13th Jan 20, 2:34 PM
    There certainly is - usually the disappointed hopefuls only find out about the decision after the cash has been paid out. The Pensions Ombudsman's website has a number of determinations where a complaint has been upheld e.g. https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-20080.pdf
    Originally posted by Marcon
    It may have been upheld but Miss D only got an extra grand for distress and inconvenience, not the 83k she was hoping for. (And the trustees had to reconsider their decision, but for all we know they could have arrived at their previous decision to award Miss D 25% again.)

    The pension trustees were not dinged for awarding the nominated beneficiary only 25% instead of the 100% on the expression of wish; they were dinged for giving contradictory reasons for their decision. They said that they had identified four potential beneficiaries and decided they should get 25% each, but they then paid 75% to the estate, which didn't accomplish that (the deceased's dad inherited the whole 75% under intestacy). The trustees were then unable to adequately explain their decision-making process to the Ombudsman. (That is the short version of the story, ignoring technical points and back-and-forth which were thrashed out before it got to the Ombudsman stage.)

    We can't know what the trustees did after being forced to reconsider their decision, but the obvious thing to do, based on the facts of the case, would be to change the 75% to the estate and instead pay 25% to the estate and 25% each to the other two beneficiaries they'd identified. If that happened Miss D would essentially have failed in her bid to overturn the trustees' discretion; the only thing her complaint got for her personally was 1,000 for distress.

    At no point in the adjudicator's or ombudsman's decision was there any suggestion that the trustees did not have discretion to award only 25% to Miss D, that they had erred by doing so, or even that they had been unfair.

    It is not a case that will give great hope to anyone who thinks they have lost out from a pension trustees' decision as to distribution of death benefits. Even if similar circumstances apply, all they will get from the Ombudsman is an order to reconsider the decision.
    • Tealblue
    • By Tealblue 13th Jan 20, 2:45 PM
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    Tealblue
    • #5
    • 13th Jan 20, 2:45 PM
    • #5
    • 13th Jan 20, 2:45 PM
    The case quoted by Marcon is simply one example, presumably to point out that your assertion was incorrect. Picking it apart just to try and prove you were correct is a waste of time when you were mistaken.

    Plenty of other cases on the PO's website if you look further - but the point has been conclusively made, which clarifies the situation perfectly adequately for OP and any other site users.
    • Malthusian
    • By Malthusian 13th Jan 20, 4:13 PM
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    Malthusian
    • #6
    • 13th Jan 20, 4:13 PM
    • #6
    • 13th Jan 20, 4:13 PM
    Er, no. When someone picks an example case to illustrate their argument, they usually pick the best example available. If the best example doesn't actually support their argument then it's a reasonable assumption that their next-best doesn't either.

    If for some reason Marcon didn't pick their best example then they can tell us what it is and we can look at that as well, the onus isn't on me to read their mind.

    However I retract the words "there is no scope for challenge" as clearly it wasn't nuanced enough. What I meant was that if the pension trustees award everything to the deceased's daughter there is no grounds for a successful challenge based on the information the OP has given. (It would not be an error in law, and bear in mind she was the sole beneficiary of his non-pension estate, which is enough to make it a decision that a reasonable person could come to, even if all of us would personally disagree.)

    There is scope for challenging pension trustees' decisions after the money has been paid out, but there has to be an error in law or it has to be a decision that no reasonable person could have come to. "They ignored the nomination form" is not enough.

    I oversimplified because I wanted to emphasise that the OP needs to give as much background as they can to the trustees and not delay. Before the award there is a chance of the trustees changing their mind. After the award the chance is reduced to whether they made an error in law or a manifestly unreasonable decision which can be challenged at the PO, i.e. extremely unlikely.
    • zAndy1
    • By zAndy1 13th Jan 20, 4:33 PM
    • 148 Posts
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    zAndy1
    • #7
    • 13th Jan 20, 4:33 PM
    • #7
    • 13th Jan 20, 4:33 PM
    Thanks for the replies everyone, I have informed rowanmoor of the background to my brother and nieces relationship , I would have thought armed with that and the fact my brother nominated his niece as sole beneficiary it would be rather odd if the trustees went against all that and awarded 100% to my brother's daughter . Granted she may be his daughter but there are extenuating circumstances here after all...
    Oh and an update on the status of the lost funds, I contacted complete compliance who replied it was Abana's responsibility to pay the redress. I've contacted Abana who initially said my brother had transferred responsibilty for the pension to a different pension provider and attached a form to prove that was the case but it was in someone else's name , albeit with the same surname so they are going to have another look into it but as of now it's clear those illiquid funds haven't been recovered. If I don't get a response from Abana in the next few weeks I'll take it up with the financial ombudsman as I'm determined to recover that money even if I don't see a penny of it, that's not my motivation here I just want justice for my brother...
    • Marcon
    • By Marcon 13th Jan 20, 10:38 PM
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    Marcon
    • #8
    • 13th Jan 20, 10:38 PM
    • #8
    • 13th Jan 20, 10:38 PM
    Er, no. When someone picks an example case to illustrate their argument, they usually pick the best example available. If the best example doesn't actually support their argument then it's a reasonable assumption that their next-best doesn't either.

    If for some reason Marcon didn't pick their best example then they can tell us what it is and we can look at that as well, the onus isn't on me to read their mind.

    However I retract the words "there is no scope for challenge" as clearly it wasn't nuanced enough.
    Originally posted by Malthusian
    Only needed one example to disprove the words 'no scope for challenge once they have paid the money out'. Other people reading this site may have assumed this assertion was correct, hence the need to point out that it wasn't. People tend to remember snippets rather than the whole thread!
    Last edited by Marcon; 13-01-2020 at 11:14 PM.
    • Malthusian
    • By Malthusian 14th Jan 20, 10:43 AM
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    Malthusian
    • #9
    • 14th Jan 20, 10:43 AM
    • #9
    • 14th Jan 20, 10:43 AM
    Oh and an update on the status of the lost funds, I contacted complete compliance who replied it was Abana's responsibility to pay the redress. I've contacted Abana who initially said my brother had transferred responsibilty for the pension to a different pension provider and attached a form to prove that was the case but it was in someone else's name , albeit with the same surname so they are going to have another look into it but as of now it's clear those illiquid funds haven't been recovered. If I don't get a response from Abana in the next few weeks I'll take it up with the financial ombudsman as I'm determined to recover that money even if I don't see a penny of it, that's not my motivation here I just want justice for my brother...
    Originally posted by zAndy1
    Either your daughter or the executors or both will need to make a formal complaint to Abana, and then wait for either their final response or eight weeks before they can go to the Financial Ombudsman.

    The executors can complain on behalf of your brother and your daughter can complain in her own right that she lost out, if and when she is awarded either the pension or a percentage of it.

    Unless you're an executor (from your post my understanding is that the solicitors are executors), if you complain Abana could just bat you away on the grounds that you don't have authority.
    • zAndy1
    • By zAndy1 14th Jan 20, 11:05 AM
    • 148 Posts
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    zAndy1
    Either your daughter or the executors or both will need to make a formal complaint to Abana, and then wait for either their final response or eight weeks before they can go to the Financial Ombudsman.

    The executors can complain on behalf of your brother and your daughter can complain in her own right that she lost out, if and when she is awarded either the pension or a percentage of it.

    Unless you're an executor (from your post my understanding is that the solicitors are executors), if you complain Abana could just bat you away on the grounds that you don't have authority.
    Originally posted by Malthusian
    Yeah appreciate that, my fear with prompting the solicitors to complain is that they have already made it clear they want all of the benefits of the avalon SIPP paid to my niece and this might sound selfish but she's already got a house out of this and thousands of on top of that. My daughter who was closer to my brother than his own daughter was and who it is clear my brother wanted to benefit from his estate should it come to that hasn't received anywhere near as much and I want her to be financially secure in the same way my niece now is. What I'm slightly confused about is where would this compensation have to be paid , would it need to be paid into a fund that ultimately trustees have discretion over it's distribution or could it be paid straight to the solicitors as part of the estate and distributed under intestate rules? As I've said before as these funds were part of the Avalon SIPP and my brother had made his niece sole beneficiary then IMO the compensation should be paid back into the Avalon SIPP and the trustees of that should make the decision who it's paid out to but whether that's even remotely likely I'm not sure...
    • thorsoak
    • By thorsoak 14th Jan 20, 12:42 PM
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    thorsoak
    Whether or not your niece wanted to know her father, or caused him heartbreak, it was your brother's wishes that his estate went to her. Her attitude towards him is, in the eyes of the law, completely irrelevant to his wishes.
    • zAndy1
    • By zAndy1 14th Jan 20, 12:46 PM
    • 148 Posts
    • 29 Thanks
    zAndy1
    Whether or not your niece wanted to know her father, or caused him heartbreak, it was your brother's wishes that his estate went to her. Her attitude towards him is, in the eyes of the law, completely irrelevant to his wishes.
    Originally posted by thorsoak
    No, he didn't make a will and where he had completed a beneficiary nomination form he always put my daughter (his niece) down as the sole beneficiary. Does that say to you that he wanted his estate to go to his daughter cos it doesn't to me? He died at 48 so it's hardly surprising he hadn't got round to making a will but the beneficiary nominations say it all as far as I'm concerned..
    • thorsoak
    • By thorsoak 14th Jan 20, 12:58 PM
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    thorsoak
    Alright - from your first post, I understood that he had made a will. It just goes to show how important it is to make a will - especially in circumstances such as these.

    My late M-i-L's sister did not make a will: she assumed that everything would go to her sister, as she was her last remaining sister. She did not know that everything would be divided between the children (or grandchildren in some cases) of her now-dead eight siblings - and my M-i-L had to find them all, and ensure that they received 8/9ths of what her sister thought would go to her. But that is the law.
    Last edited by thorsoak; 14-01-2020 at 1:01 PM.
    • Malthusian
    • By Malthusian 15th Jan 20, 10:17 AM
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    Malthusian
    No, he didn't make a will and where he had completed a beneficiary nomination form he always put my daughter (his niece) down as the sole beneficiary. Does that say to you that he wanted his estate to go to his daughter cos it doesn't to me?
    Originally posted by zAndy1
    It does, yes. If he wanted his estate to go to his daughter he'd have made a Will. I understand why you are disappointed but his wishes were what they were. For all we know he nominated his niece for the pensions in the knowledge that his daughter would receive his estate and had no need of the pensions.

    The fact that she was beastly to him doesn't mean he didn't want her to receive his estate. People do things out of love for people who throw that love back in their faces all the time, especially parents for their children.

    If the system eventually works in her favour, your daughter should still receive a windfall of at least 50,000 and possibly six figures (depending on whether Abana goes bust and the FSCS kicks in, or pays the full redress due) from someone who isn't a direct ancestor, which is already a very good stroke of fortune.
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