22 January 2020 | Comment | Article by James Coleman
The Financial Services Compensation Scheme ('FSCS') has added four more adviser firms to its ever growing list of firms declared in default.
Economic Financial Solutions, trading as Torch Wealth Management, based in Wales, were declared in default by the FSCS on 9 January 2020. This means that the FSCS is now accepting claims in relation to advice the firm gave to individuals to make unsuitable investments.
Blackstar Wealth Management (‘Blackstar’) was declared in default on 14 January 2020.
Prior to being declared in default, Blackstar had previously had its permissions restricted by the Financial Conduct Authority. This was after they were found to have advised a number of clients to transfer their personal and defined benefits pensions into Self-Invested Personal Pension (‘SIPP’) schemes for the purposes of making high-risk investments not suitable for retail clients, most notably in the German property scheme, Dolphin Trust (now named German Property Group).
Chartergroup Financial Management, a firm based in Devon, and NJ Associates, a firm based in Ashford were also declared in default by the FSCS on 24 January 2020.
The common theme between all of these firms is that they had provided unsuitable advice to individuals in relation to SIPP’s and could no long deal with the complaints being levied against them.
The FSCS has revealed that it is receiving more claims in relation to SIPPs than it is for any other financial product. The lifeboat fund expects to settle around 7,700 cases in 2020-21, costing an estimated £635 million on the industry.
If you believe you were given unsuitable advice by Blackstar, or indeed any regulated financial adviser, please contact our specialist Financial Mis-Selling Team, or click here for more information.