The Financial Services Compensation Scheme (FSCS) has encouraged Forthplus customers that were advised to transfer their pension into the company’s self-invested personal pension (Sipp) by an IFA to make a claim against their adviser.
This comes months after Forthplus Pensions went into administration and weeks after iPensions Group acquired the business assets of the now-defunct company.
In an update on 10 January 2022, the FSCS said it is aware some Forthplus customers were advised by IFAs to transfer existing pensions into the Forthplus Sipp.
It added that if clients were advised by a Financial Conduct Authority (FCA)-regulated adviser that’s no longer trading, then they should submit claims against their IFA to the FSCS first. But, when it comes to IFAs that are still trading, clients need to complain to the firm first before the FSCS can consider the claim.
Claims against Forthplus Pensions
The UK lifeboat scheme said: “The FSCS considers different factors when calculating losses on pension advice, a claim against your financial adviser, compared to claims against Sipp operators, a claim against your Sipp provider.
“This means you may be eligible to receive more compensation for any losses by claiming against your financial adviser than if you just made a claim against your Sipp provider. So, we recommend submitting a claim for compensation to us against your IFA first.”
The FSCS was previously referring customers who had been advised by certain IFAs that had ceased trading to Forthplus Pensions. This is because FSCS “must be satisfied that customers have first exhausted any right to claim against any connected firms that are still trading”.
Now Forthplus Pensions has failed, the FSCS “will no longer direct customers to contact this firm, and we may now be able to consider claims against certain failed authorised IFAs who advised customers to invest via a Forthplus Sipp”, it added.
The FSCS said: “Although we’re accepting claims against Forthplus Pensions Ltd, they will not immediately be passed to our claims processing teams for assessment. We need first to establish whether the claims are eligible under our rules. We are currently investigating this, and it may take some time.”
The UK lifeboat scheme told International Adviser that it has received 192 claims against Forthplus Pensions so far.
Also, the FSCS said that it is now accepting customers’ claims against Czech Republic-based firm Planet Pensions involving advice given in connection with pension transfers into and from the Forthplus Sipp.
Planet Pension was formerly known as Square Mile Financial Services and went into liquidation in January 2021. It had EEA permissions and was allowed to offer services to UK clients via passporting.
The UK lifeboat scheme said that “customers have alleged that Planet Pensions gave customers unsuitable advice in connection with pension transfers into and from several pension schemes”, this includes the Forthplus Sipp.
The FSCS added that it “will investigate whether these claims against Planet Pensions are eligible for compensation under our rules” and “it is also aware that Planet Pensions provided advice to customers to transfer into and from several other pension schemes”.
“FSCS is also now accepting customers’ claims against Planet Pensions involving advice in connection with pension transfers into and from those other schemes,” it said. “FSCS will also investigate whether these claims against Planet Pensions are eligible for compensation under our rules.”
The lifeboat scheme had previously stated that it would only consider claims against Planet Pensions where “customers had first exhausted any right to claim against connected firms still trading who may also be responsible for some, or all, of the customers’ losses”.
The FSCS said it has received three claims against Planet Pensions for the time being, and it is still investigating the activities of the Czech company.