In an update on its website the FSCS said it has started accepting claims against Consumer Wealth, which entered liquidation in January following 13 Financial Ombudsman Service (Fos) complaints against the firm.
The lifeboat is now able to accept claims due to Consumer Wealth recently becoming insolvent, with the liquidation now in the process of converting to a creditors' voluntary liquidation.
Those who have already made a claim against the firm to the Fos do not need to take any action as the Fos will contact them to ask permission to transfer their claim documents to the FSCS.
The lifeboat told FTAdviser that to date it has received 56 claims against Consumer Wealth with more coming in.
The value of these claims is unknown but they concern investment portfolios, pension advice and personal pension transfers.
The FSCS can pay out a maximum of £85,000 on such claims while the Fos can order payouts of £160,000 for incidents that took place before April 1 this year, and £350,000 for complaints about advice that was given after that date.
Consumer Wealth has not been declared in default but is under investigation by the FSCS. This means the lifeboat fund is not yet in a position where it can settle claims.
It will declare the firm in default if it deems it cannot meet the claims against it and the FSCS has received at least one valid claim.
The FSCS stated that many Consumer Wealth clients "seem to have been advised to invest in high risk, non-standard investments, many of which are now illiquid".
The FSCS added: "We’re also aware that Consumer Wealth advised some of its customers to switch existing personal pensions to [self-invested personal pensions] Sipps."
Consumer Wealth has been identified as a distributor of the Greyfriars Asset Management Portfolio Six (P6) investment, which provided investment into non-standard assets and about which the Financial Conduct Authority (FCA) has raised concern.
Greyfriars Asset Management was a wealth management business which had seen its permissions restricted by the FCA before becoming insolvent last year.
Adam Stephens and Henry Shinners of Smith & Williamson were appointed as joint administrators of Greyfriars on October 23, following the firm’s application for insolvency.
Two days later, the administrators concluded the sale of Greyfriars’ Sipp and small self-administered scheme (Sass) businesses to Hartley Pensions for £820,000.
The advisory arm of Greyfriars was sold to Insight Financial Associates for £440,000 in a deal that completed on October 16.
Apart from the divisions sold to Insight and Hartley, Greyfriars also provided discretionary fund management services. But this division commenced a wind down in 2017 and is no longer active.
The administrators said they anticipate they will be able to realise enough capital from the firm to pay a dividend to unsecured creditors.
Last month (June), they stated due to ongoing discussions it was unclear whether certain claims against Greyfriars would be accepted by the FSCS.
At the time, the FSCS received 16 claims against Greyfriars totalling £1.1m. But so far there has been no agreement as to whether and how these claims will be processed.
The FCSC stated: "FSCS is also accepting claims against Greyfriars and we're currently assessing where the responsibility for any customer losses should lie."
amy.austin@ft.com
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