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'I lost £132,000 of my pension pot to a 'toxic' bond': TONY HETHERINGTON investigates

Tony Hetherington is Financial Mail on Sunday's ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below. 

Probe: Martin Vaughan ran Clear Capital Management, which was struck off by Companies House

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. 

Tony Hetherington replies: 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 de-listed. 

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.

Why does Mercer keep stonewalling over its payouts?

Ms A.G. writes: I retired in August after working at Morrisons for 16 years, and a month earlier I applied to Mercer, the company that administers the Morrisons pension scheme, to say that I wanted my small pension pot as a lump sum. 

I expected the money when I retired, but I have received nothing. 

Struggle: Getting information from Mercer was like extracting teeth from an unhappy crocodile

Tony Hetherington replies: You told me you emailed Mercer, but only got back an automated reply saying someone would contact you. And when you threatened to go to the Pensions Ombudsman, Mercer replied that it would pay you in a few weeks. 

As you said to me: 'If I still worked for Morrisons and did not get paid on time, this would be unacceptable, so why should this conduct by Mercer be any different?' 

It's a good question, but there is no answer. When I contacted Mercer, it replied a fortnight later, saying you had now been paid. 

Why was there a delay? Mercer stonewalled: 'In line with company procedures, we do not comment on individual members.' Mercer then refused to comment on why it refused to comment. It had your signed consent, allowing it to speak to me, but opted to ignore it. 

Despite being a major pensions company, Mercer has form for this. Last March, I reported that it withheld a widow's pension, demanding that she repay £208 it claimed it overpaid her late husband. 

Getting information from Mercer was like extracting teeth from an unhappy crocodile, until the firm finally confessed the £208 had never been paid in the first place. If my work pension was in Mercer's hands, I think I would change jobs.

New home loan hit by furlough

S.A. writes: My daughter is buying a new-build house and asked Nationwide to 'port' her current mortgage to the new property. 

However, as she is currently on flexible furlough, Nationwide has refused her request. 

Tony Hetherington replies: Your daughter is no longer on furlough, but even when she was not working normally, her job as an air traffic controller was safe. 

Nationwide told me that when she applied for the new mortgage, her existing home loan stood at £224,000 and she needed a further £35,000. 

However, she was incorrectly told that she could port her mortgage online, and that Nationwide would accept furlough income.

 In fact, Nationwide did not take furlough income into account in considering a fresh mortgage application. It has offered her £100 as an apology for this mistake. 

Nationwide did reconsider after I contacted the society, and it indicated it would approve your daughter's loan after all and let her have the full £259,000. 

By then though, you had provided your daughter with some of the funds she needed, and she had received a mortgage offer from Santander for the full amount.

If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 2 Derry Street, London W8 5TS or email [email protected] Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.