Sipp claims against failed advisers rising, says FSCS

Sipp related claims against financial advisers who are no longer trading have continued rising, The Financial Services Compensation Scheme said today. The claims related to advice given by firms to transfer funds from existing pension schemes to Sipps. The FSCS said in many cases the Sipp fund was then invested in non-standard asset classes, many of which have become illiquid. FSCS officials said their experience of these claims has been consistent with warnings published by the Financial Conduct Authority in relation to Sipps, including the FCA's alert that was published in April 2014. FSCS has been investigating the Sipp claims it has received to establish if the failed IFAs in question were liable. The body expects to be in a position to start processing claims in September. As a result of the FSCS investigations into Sipp claims, the following firms have now been declared in default: • TailorMade Independent Limited• 1 Stop Financial Services• Kynaston-Carnoustie Financial Consultancy Limited• Crawford Scott Limited FSCS expects to see further similar failures. In a statement on its website the FSCS said: "We will aim to issue decisions on claims relating to these firms within six months of receipt of the claim or the default of the IFA firm, whichever is later. "In order to establish whether a claimant is eligible for compensation, we will consider the advice given by the advising firm. "Determining losses suffered by investors is likely to be complex, in particular where the claims involve both pensions and investment advice, and where some of the assets are difficult to value. "To pay compensation, FSCS will need to be satisfied that the firm in default can be held legally liable for the losses suffered by the claimant, as opposed to, for example, some other party such as another firm involved in the transaction or a party that caused an investment to fail. "We may consider making interim payments of compensation where we are not yet able to account for all elements of a claimant's loss."

Sipp claims against failed advisers rising, says FSCS

Related items