The Financial Ombudsman Service (Fos) has received 500 claims relating to GPC Sipp Limited, which entered administration last week.
GPC Sipp, formerly known as Guardian Pension Consultants, appointed Adam Stephens and Henry Shinners of Smith & Williamson as joint administrators last week (June 12).
GPC became insolvent because it had about 2,700 Sipps holding alternative investments, several of which failed, such as Harlequin Properties, a luxury hotel development that was largely never built.
The assets in these Sipps were placed between 2009 and 2012. And in light of problems with these investments the company has not marketed its services since 2013, according to the administrators.
FTAdviser understands that the Fos has about 500 cases involving GPC Sipp, with many of these complaints relating to the investment of pension funds in unregulated schemes which subsequently failed.
The financial loss is expected to be considerable but an actual value has not yet been estimated.
The Financial Services Compensation Scheme (FSCS) stated on Monday (June 17) that the claims that are with the Fos will be transferred to the FSCS, meaning a compensation limit of £85,000 will apply if the complaint is about a firm that failed after April 2019, before that it was £50,000.
By comparison, the Fos has a limit of £160,000 for business written before April.
The FSCS stated the Fos will be in touch with individuals shortly to ask permission to transfer the claims documents to the FSCS.
From then on it will be down to the FSCS to determine whether or not it will accept a claim and on what basis the loss should be calculated.
GPC Sipp Limited provides technical and administration services to Guardian Pension Trustees Limited which acts as the corporate trustee of 3,200 self-invested personal pensions and 50 small self administered schemes with a total investment value of £130m.
To date 141 Sipp clients have come together to launch legal action against Guardian. All of these have already been compensated for their losses by the FSCS, most likely in relation to advice given to transfer.
GPC is contesting the Fos complaints and is defending the litigation claims, the administrators maintained.
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