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Greyfriars AM and Berkeley Burke declared in default

Glasgow-based IFA business and West Midlands wealth manager also named by the UK lifeboat service

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The Financial Services Compensation Scheme (FSCS) has declared 12 firms in default in April 2020.

Some six firms provided wealth, investments, life insurance or financial advice.

“FSCS announces these declarations regularly, to let consumers know they could get back the money they have lost as a result of their dealings with any of those firms,” the UK lifeboat scheme said.

The businesses that were declared in default between 1 April and 30 April 2020 are:

• Opal Mortgage Life & Pensions – London;
• Greyfriars Asset Management – London;
• Saxon Capital – London;
• Berkeley Burke Sipp Administration – Leicestershire;
• Fusion Wealth Management – West Midlands; and
• Clydegrove Financial Consultants – Glasgow.

Greyfriars

In October 2018, self-invested personal pension (Sipp) provider and financial advice firm Greyfriars Asset Management sold its pension businesses to Hartley Pensions after it went into administration.

Greyfriars AM was known by financial advisers for its discretionary fund management (DFM) service.

It promoted a fund called Portfolio Six which invested in a range of overseas property-based schemes including the acquisition of car parks.

The firm was barred by the Financial Conduct Authority (FCA) from accepting new money into Portfolio Six at the end of 2016 and the following year was banned from accepting any new client money across its regulated businesses.

Berkeley Burke

In September 2019, Berkeley Burke Sipp Administrator appointed RSM Restructuring Advisory as its administrator.

The firm was forced to declare insolvency following a series of legal complaints regarding its acceptance of high-risk non-standard investments into its non-advised Sipps, the FCA said at the time.

It was sold to Hartley Pensions on 18 September.

Establishing due diligence

At the time, the FSCS said it opened claims against the Sipp firm.

The UK lifeboat scheme said: “[The] FSCS is working closely with the firm’s administrators RSM and is investigating the practices of [Berkeley Burke].

“[The] FSCS is seeking specifically to establish what levels of due diligence were carried out by the firm, prior to permitting customers to make specific investments under their pensions.

“Firstly, we need to establish whether there are protected claims against [Berkeley Burke]. For this to happen we need to be clear that [Berkeley Burke] owes a civil liability to customers.

“We’re aware that many [Berkeley Burke] customers were advised by independent financial advisers to transfer existing pensions into a [Berkeley Burke Sipp].

“Following the pension transfer, customers had their pension funds placed in high-risk, non-standard investments, many of which have become illiquid.”

Clients not happy

In 2017, the Financial Ombudsman Service (FOS) upheld complaints against Berkeley Burke related to the due diligence carried out before accepting high-risk investments.

The FOS ordered the firm to pay its customers back.

But the Sipp firm appealed the ombudman’s decision through a judicial review, although unsuccessfully.

At the same time, 28 customers took legal action against it for similar claims.

While it was granted leave to appeal the judicial review, Berkeley Burke could not afford the costs of doing so, forcing it to declare insolvency.

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