FSCS to Pay Out Compensation to Failed Berkeley Burke SIPP Clients
Updated: May 20, 2020
The Financial Services Compensation Scheme (FSCS) has received 1474 claims towards the failed SIPPs provider Berkeley Burke which could see the scheme potentially paying out millions in compensation.
As of 1st April, the lifeboat scheme puts Berkeley Burke into default and claims now will be processed to establish the level of compensation to clients affected.
Investigations by the FSCS found failed due diligence by the SIPPs provider allowing customers to make unregulated investments with their pensions.
It is not known yet as to how much the compensation amounts to be but Berkeley Burke's administrator Adrian Allen estimated the claims bill could amount up to £158m.
For individual investment claims, the FSCS scheme pays a maximum of £85,000 and the claims up-to-date amounting to £125m clients are eligible for a maximum payout.
The FSCS’s findings found that many independent financial advisers recommended many Berkeley Burke clients to transfer their existing pensions into a Berkeley Burke SIPP. After the transfer into the high-risk, non-standard investments which some have since become illiquid has resulted in claims made against the IFA’s which has totalled so far £54m in claim payouts.
Due to claims being made against the high-risk investments between 2010 and 2012 Berkeley Burke went into administration last year after an appeal against a Financial Ombudsmen Service was dropped. This resulted in them being ordered to compensate a client after their failings in due diligence with his investment.
With the Court of Appeal letting Berkeley Burke appeal the decision last year the company collapsed due to lack of funding and company administrators RSM was appointed with the aim of selling the business with a pre-pack deal with Hartley Pensions but they would not take on liability for any outstanding compensation claims.
As it stands, the remaining Berkeley Burke group and companies within has no ties to the failed SIPP business.
If you have been affected by the SIPP services offered by Berkeley Burke 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