In August 2000, Mr T invested £123,000 ($161,408, €138,122) in a flexible income plan with NPI, which was acquired by closed-book consolidator Phoenix Life in 2012.
On 2 June 2015, Phoenix Life wrote to James Hay to confirm that the policy would mature on 4 July that year.
On 3 July, £216,366 was disinvested from Mr T’s Sipp.
The money was moved to another Sipp provider and invested in five funds between 19 and 20 August.
Mr T argued that the money should not have been disinvested, as the original terms and conditions did not state that this was automatic upon the maturity date.
He held both Phoenix Life and James Hay responsible for the encashment and subsequent financial losses he incurred as a result of not having the money invested.
An adjudicator upheld the complaint against Phoenix Life but did not agree that James Hay acted inappropriately.
Given its role as a trustee, the adjudicator stated that it was reasonable for James Hay to follow the instructions issued by Phoenix Life in June 2015: “As the disinvestment was invoked by Phoenix Life, it bears the liability for any financial loss.”
Phoenix accepted that it made an error in instructing James Hay to disinvest the fund, according to the ombudsman’s report.
The insurer was told to reimburse Mr T’s new pension for any loss incurred because of its actions and pay £500 in compensation for the “significant distress and inconvenience” it caused him.
Mr T did not accept the decision and the complaint was passed to ombudsman Anthony Arter, who agreed with the adjudicator.
Arter wrote: “It was the role of the trustee to respond to Phoenix Life’s instructions. In this case, James Hay simply provided the necessary bank account details for transferring the disinvested funds.
“The disinvestment was instigated by Phoenix Life. I do not consider James Hay responsible.”
He upheld the compensation awarded to Mr T, as outlined by the adjudicator.