The Financial Services Compensation Scheme is now accepting claims against self invested personal pension provider provider Pointon York, which entered liquidation in November.
In an update on its website, the FCSC said it was considering whether claims against Pointon York were liable for compensation.
Claims submitted to FSCS against Pointon York relate to the Sipp operator's due diligence obligations in allowing customers to make specific investments under their pensions.
The FSCS told FTAdviser it had received 31 claims against Pointon York Sipp Solutions to date, with some others in the pipeline.
Pointon York went into liquidation in November 2018.
The FSCS said it was aware that “some Pointon York customers were advised by independent financial advisers to transfer existing pensions into a Pointon York Sipp”.
Following this transfer, clients had their funds placed in high risk, non-standard investments, some of which have become illiquid.
Although the company has not been declared in default, the FSCS said it was currently investigating the practices of Pointon York to establish what levels of due diligence were carried out before allowing customers to make investments through their pensions.
The FSCS added: “Sipp operator due diligence has been an industry ‘hot topic’ in recent years and FSCS is aware that there are a number of pending civil claims in the High Court against various Sipp operators in respect of alleged due diligence failings.”
It also said that it had already assessed and paid a number of claims made against IFAs it had already declared in default, in relation to advice customers received to transfer their pension into a Pointon York Sipp.
The FSCS has told clients who were advised by an FCA-authorised adviser which is still trading to transfer their existing pension or to invest through a Pointon York Sipp that they needed to complain to the adviser before the FSCS can consider their claim.
If a customer was advised by an FCA-authorised adviser that is no longer trading then they must firstly submit a claim to the FSCS against the adviser.
The FSCS stated: “The FSCS considers different factors when calculating losses on pension advice (a claim against your financial adviser) compared to Sipp investments (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.”
The FSCS said that although it was accepting claims against Pointon York, they will not immediately be passed to its claims processing teams for assessment.
Firstly it needs to establish whether there are protected claims against Pointon York. For this to happen it has to be established in law that the company owes something to its customers.
In 2014, Curtis Banks acquired Pointon York’s Sipp book for an undisclosed sum.
Speaking to FTAdviser at the time, Paul Tarran, finance director at Curtis Banks, said the deal meant 7,000 schemes came across to Curtis’s books from Pointon York.