The Financial Conduct Authority (FCA) has written to all former clients of Avacade, an unregulated pension introducer, to inform them it is taking legal action against the firm and its directors.
The FCA has moved to act against the firm and its directors after concluding they were “operating unlawfully by providing financial advice to clients” and “making arrangements for clients to transfer their pensions into self-invested personal pensions (Sipps)”.
Its investigation found Avacade carried out “regulated activities without being authorised to do so” and “made misleading statements to clients”.
The FCA confirmed legal proceedings began in September 2017 and will consist of two trials, the first to prove liability and the second to determine the amount of losses suffered by investors.
The first trial is due to commence in January 2020.
Duty of care
A number of legal firms, including financial mis-selling specialist Anthony Philip James and Co, are bringing cases against Sipp providers, including Liberty Sipp, on behalf of former Avacade clients.
Glyn Taylor, financial mis-selling solicitor at Anthony Philip James and Co, said: “We welcome the FCA action against Avacade. It confirms our argument that Avacade was providing advice to clients despite not being a regulated firm.
“This is a key part of the cases we are bringing against Liberty Sipp on behalf of our clients and the FCA action will strengthen these cases. Our cases against Liberty Sipp will continue to progress in tandem with the FCA action against Avacade.
“We are also alleging that Liberty Sipp has a separate duty of care to clients when they accepted such a large number of introductions from Avacade, and that they have breached this duty of care.
“What’s more, we allege that there was joint enterprise between Liberty Sipp and Avacade.”