The Financial Services Compensation Scheme (FSCS) announced Friday that three self-invested person pension scheme (Sipps) operators – Stadia Trustees; Brooklands Trustees; and Montpelier Pension Administration Services – are in default.
The FSCS said it had received 150 claims for compensation in relation to these Sipp operators and expects more to follow. In addition, Stadia and Brooklands were also the trustees of the Sipps.
UK regulator the Financial Conduct Authority cancelled Montpelier’s permission to carry on regulated activities on 14 October 2011 and has declared the managing director of Montpelier “not a fit and proper person” as a result of failings in due diligence on introducers and Sipp assets.
Many of the Sipp investments in the three failed schemes were high risk speculations on oil, foreign hotel rooms and foreign vineyard investments made by consumers with little experience and modest funds. The FSCS said that, in most cases, the investments are now illiquid or worthless.
Often, victims were not actively looking for alternative pension investment opportunities but made the investment following a cold call by an overseas introducer who referred the consumer to the Sipp operator on a non-advised basis.
In some instances, investors transferred all or the vast majority of their existing pension from an occupational pension scheme into the Sipp.
The FSCS’s chief executive Mark Neale said: “We are satisfied in these cases that certain claims are eligible for compensation, and expect to receive more claims of this nature in the coming months. We will be getting in touch with customers of these firms as we may be able to help.”
The lifeboat scheme may pay compensation to an eligible claimant if it is satisfied that their application for compensation relates to a protected claim. A protected claim is a valid claim made in respect of a civil liability owed by the firm (or successor) to the claimant (or successor).
Kevin Soutar says:
We have been waiting a few years now for the Regulator to make this BIG decision. This must surely now finish of a few greedy Sipp Providers who have dabbled in this type of dodgy dealings with unregulated introducers scamming life investments from innocent people. Justice at last.
Russell David Stagg says:
As a professional adviser of some experience it constantly amazes me that this kind of thing is allowed. I work in an offshore regulated environment and I fail to see why the FCA continues to allow non licensed and non regulated people to move pension schemes away from the UK. The hoops I have to jump through and the constraints on where monies can be invested are quite onerous – storage pods,Polish Property and diamonds just dont’ make the list!!