Administrators have sold Berkeley Burke's Sipp arm to Hartley Pensions.
Part of Berkeley Burke has gone into administration however the Sipp portion of the company has been sold to Hartley Pensions after the company struggled to cover the financial costs of defending due diligence claims made against them.
Berkeley Burke Sipp Administration Limited's directors put the company into administration on 18th September 2019 as it could not afford to defend the redress claims made against them.
RSM were the appointed administrators and immediately after being appointed they announced that the Sipp arm of the business would be sold out of administration in a pre-pack deal with Hartley Pensions, who have acquired a number of client books from troubled Sipp providers recently.
A pre-pack administration is an insolvency procedure where a company arranges to sell its assets to a buyer before appointing administrators to facilitate the sale.
Berkeley Burke went into administration because it was unable to cover the financial costs of defending claims made against it in respect of the firm's alleged due diligence failings when accepting high risk investments between 2010 and 2012.
The Sipp provider is currently embroiled in a case from 2014, in which the Financial Ombudsman Service ruled it had to compensate a client after it failed to carry out adviser style due diligence on his investment.
It is expected that the Financial Services Compensation Scheme will see a number of claims against Berkeley Burke coming in following the firms inability to pay out itself.
Clients of Berkeley Burke have been told to direct their claims to the FSCS in the first instance and those who are ineligible to claim through the FSCS, mainly non-personal clients, should submit their claims to the administrators.
Adrian Allen was one of the joint administrators and said the Financial Conduct Authority had accepted RSM's appointment as administrator.
He also stated that "the sale to Hartley will provide continuity of service to the company's clients and ensure that all clients interests are served whilst delivering the best available outcome for both clients and creditors."
Following the sale, all Berkeley Burke clients will transfer to a Hartley Sipp unless they contact the company to say that they wish to transfer to another Sipp plan of their choice.
According to the administrators, Hartley will be training a number of the former Berkeley Burke administration staff based in Leicester to ensure Sipp transfers proceed in an efficient and timely manner.
All other companies within the Berkeley Burke Group will continue to trade as normal and are not affected by the administration of its Sipp business.
Hartley Pensions has bought a number of failing Sipp firms client books in recent years. This includes GPC Sipp's £130m client book last month and almost a year ago they bought Greyfriars Asset Management's Sipp business for £820,000 when the firm entered insolvency.
Hartley also announced back in may last year that they were going to administer the good and bad assets of the collapsed Sipp provider Lifetime Sipp which went into administration 2 months earlier.
If you would like to discuss a potential Sipp or investment claim with us, we would be more than happy to talk to you about your options.
Please call us on 01903 868 251 for more information.
The information in this article was sourced from: https://www.ftadviser.com/pensions/2019/09/19/administrators-sell-off-berkeley-burke-s-sipp-arm/?page=2