FSCS Declares Financial Advisers, SIPPs and DFM in Default
Updated: Jul 17, 2020
The Financial Services Compensation Scheme (FSCS) announced last month, three advice firms, a self-invested personal pension provider, and a discretionary fund manager have gone into default due to thousands of high-risk claims made against them.
As of 18th May, an update published by the FSCS confirmed 12 firms had defaulted with the lifeboat scheme in April that includes advice firms Opal Mortgage Life & Pensions Limited, City One Securities and Clydegrove Financial Consultants Limited.
Alongside these firms was troubled wealth manager Greyfriars Asset Management who have already received hundreds of claims against it relating to SIPPs, pension advice and personal pension opt outs.
Greyfriars permissions had been restricted by the Financial Conduct Authority before administrators were appointed in October 2018, shortly after Hartley Pensions invested £820,000 buying the wealth manager’s SIPP and small self-administered scheme (Ssas) businesses.
The FSCS are aware that FCA authorised advisers were recommending clients to invest with Greyfriars, transferring their existing pensions or investments through a SIPP and if the adviser is no longer trading, more compensation claims of this nature will be heading to the FSCS.
Another failed provider, Berkeley Burke Sipp Administration Ltd, who defaulted last month, could lead to more than a hundred million pounds in compensation pay outs due to the FSCS receiving over 1.474 claims made against them.
It is not yet known how much the compensation amounts will be but the administrator of Berkeley Burke’s SIPP arm, Adrian Allen has previously estimated the FSCS could end up footing a claims bill of up to £158m. This has been due to the result of clients placing their pension funds into high-risk non-standard investments that some have since become illiquid, meaning they cannot be sold or traded.
The Financial Compensation Scheme has in total paid out £260bn in compensation claims to clients of failed firms since its inception in 2001.
If you have been affected by financial services offered by Opal Mortgage Life & Pensions Limited, City One Securities, Clydegrove Financial Consultants Limited and Greyfriars Asset Management and would like to discuss how we may be able to help give us a call on 01903 868251.
Information in this article was sourced from