Sipp provider shakes up distressed asset book

Sipp provider shakes up distressed asset book

Self-invested personal pension (Sipp) provider Carey Pensions is regrouping distressed assets into one book but denied the move was in preparation of a potential sale.

The firm told FTAdviser it was moving Sipps holding distressed assets, non-standard assets and those currently valued at nil, to the Carey Pension Scheme two trust (CPS2), to group them with former Rockingham Sipp assets taken over as part of a regulatory solution in 2012.

This was for operational reasons, Carey’s chief executive, Christine Hallett, said.

She denied any intention to either liquidate the bad assets or to sell off the remaining good book.

Ms Hallett said: "We have decided internally to transfer some of the clients that are in the other trust with investments that don't currently have any value into the second trust that our technical and compliance team looks after.

"Sipps that are invested in distressed assets have to be administered in a very specific way so the decision was purely for operational reasons.

"From a systems point of view we can get the reporting done much easier this way."

The assets in question relate to investments in unregulated products such as store pods, which were made between 2011 and 2013.

Carey Pensions has had a number of claims brought against it in relation to failed unregulated assets referred to it by unregulated introducers.

It found itself on the wrong end of a decision by the Financial Ombudsman Service, published in November, after a client invested in storepod firm Storefirst and Australian farmland via Gas Verdant through one of its Sipps.

Carey's accounts for 2016 showed "a number of complaints and legal cases relating to some historic business which is now being run down" had been brought against it, contributing to a £153,784 loss after profits of £166,552 in the year before.

Ms Hallett would not disclose the number of Sipps transferred over to CPS2 but said members would be given the choice to stay in their current arrangement should they refuse to switch.

She said investors would not be charged for the transfers of the assets or their continued administration if they are valued at nil, for example while claims are being processed by the Financial Services Compensation Scheme (FSCS).

In cases where there is some liquidity or where they have been suspended for a limited time in order to be restructured, charges will resume further down the line.

She also said Carey Pensions would continue to shoulder any liabilities associated with the distressed assets on its books.

She said: "I can assure you we are doing this purely as an internal process. It was an efficiency decision so that the members who are in these types of assets can be administered and can go directly and talk to the administrators and other Sipp members in more standard type arrangements can be dealt with.

"Carey will try and survive in this world as an independent Sipp provider. We believe there continues to be a place for independent Sipps despite some of the historic stuff that went on."