TaylorMade Independent, 1 Stop Financial Services, Kynaston-Carnoustie Financial Consultancy and Crawford Scott have now been declared as “unable, or likely to be unable to pay claims” against them. The FSCS added it expects to see similar failings in the future.
The IFAs have received an increasing number of claims in relation to advice they had given to transfer funds from existing pension schemes to Self-Invested Personal Pensions, despite the fact they are no longer trading.
In many cases, the SIPP fund was then invested in non-standard asset classes on the recommendation of advisers, and many of the funds subsequently became illiquid.
The FSCS said the claims are consistent with warnings published by the Financial Conduct Authority and that it has been attempting to establish whether the IFAs are liable.
It added that it expects to be in a position to start processing the claims in September, and will aim to issue a decision on claims relating to the default firms within six months.
The FCA banned 1 Stop Financial Services from the industry in April after they lost nearly two thousand customers' money by convincing them to invest in high risk products such as diamonds and overseas property through SIPPs.
Partners at the company, Andrew Rees and Timothy Hughes, were made to pay £490,100 to the FSCS for advising customers to switch £112m worth of pensions into SIPPs.
As reported yesterday, the Financial Ombudsmen Service last week upheld a complaint against SIPP provider Berkeley Burke for failing to meet FCA guidelines over a collapsed £29,000 unregulated collective investment scheme, the first time a provider has been held accountable in these circumstances.
The company has been ordered to pay the investor, referred to as Mr A, the total value of his investment and £500 for distress and inconvenience as well as any outstanding fees after his investment in Sustainable AgroEnergy became illiquid when the company collapsed.
Despite not giving the advice to make the investment itself, ombudsmen Roy Milne said he was satisfied that if the company had followed the guidance given by the FCA on SIPPS that the client “would not have started the SIPP”.
