Between March and October the Financial Services Compensation Scheme (FSCS) declared 45 firms in default, including two self-invested personal pensions (SIPPs) and 30 advice firms.
The FSCS is the industry’s lifeboat fund or fund of last resort. It’s mission is to provide a trusted compensation service to the customers of financial service firms that are in default, which is a technical term used to describe a firm that has failed or is unable to satisfy claims brought against it.
The firms declared in default include two firms facing claims relating to advice on pension transfers.
The first firm, S&M Hughes Limited, trading as Crescent Financial was a Swansea based firm caught up in the British Steel transfers. Thousands of British Steel employees were advised to transfer their defined benefit, final salary pensions, sacrificing guaranteed benefits and in some cases, thousands of pounds of their retirement pot. Read more here.
The other firm, Kingsway Wealth Management, based in Manchester was a firm that found itself in hot water as a result of the negligent advice rendered by its appointed representative, Pension Transfers Limited. As the principal firm, it was responsible for the actions of Pension Transfers Limited and their liabilities.
In addition, two providers of self-invested personal pension plans have been placed in default. Both firms were known to have been facing large numbers of Financial Ombudsman Service claims having accepted unregulated and high-risk investments into their SIPPs without carrying out appropriate due diligence.
- Guinness Mahon – Read more here
- Pointon York
If you think you might have received poor advice from a firm in default or transferred your pension into one of the SIPPs listed above, you may be entitled to seek compensation.