The Financial Services Compensation Scheme is currently investigating claims received against an advice firm, which had been taken to the ombudsman over pension transfer advice.
St Martin's Partners entered into liquidation on June 14 and appointed financial recovery firm Carter Clark as liquidators.
The FSCS told FTAdviser that it has completed a review of the firm and is currently investigating claims received, although it was unable to say how many claims had been received.
If the FSCS finds a claim valid under its own rules then it will declare the firm in default.
The Financial Ombudsman Service (Fos) has also received claims against St Martin's Partners and ordered compensation for the client in at least one instance.
It is unknown whether St Martin's Partners will have the funds to pay this compensation or whether the FSCS will pay out instead.
In the 26-page Fos decision, a client claimed he had suffered a loss following the transfer of his existing personal pensions to a newly opened Sipp and that St Martin’s Partners were responsible.
The client, who the Fos called Mr R, was introduced to St Martin’s Partners by an adviser who recommended that he should open a Sipp and consolidate his other personal pension plans so that he could then invest his money.
In September 2012, St Martin’s Partners sent Mr G’s Sipp application to the provider and a Sipp with Guardian Sipp (now GPC, in administration) was set up.
A total of £47,739 was transferred from Mr G’s pension plans and an investment into an unregulated overseas agricultural bond was made.
In January 2013, a further £24,850 was transferred from a remaining personal pension plan and all remaining funds not invested in the bond were kept in cash.
St Martin’s Partners invoiced the Sipp provider in October 2012 for £1,432 for setting up the Sipp and an additional adviser fee was paid to St Martin’s Partners following the January 2013 transfer.
In November 2016 Mr G complained to St Martin’s Partners saying the firm had “attempted to operate and service on an execution-only basis” but this hadn’t been properly carried out.
But St Martin’s Partners dismissed Mr G’s complaint claiming that both Alternative Asset Finance and St Martin’s Partners operated on an execution-only basis throughout the process.
St Martin’s Partners had used part of its business called Alternative Asset Finance to provide transfer services to the client.
St Martin’s Partners said: “In transferring the client’s pension fund into a Sipp Alternative Asset Finance were carrying out, at the request of the client, a purely administrative service on an execution-only basis.
“Neither we nor Alternative Asset Finance have at any time given advice to the client relating to the transfer of the client’s pension or any investments subsequently made through the Sipp."
The Financial Conduct Authority’s definition of an execution-only transaction is “a transaction executed by a firm upon the specific instructions of a client where the firm does not give advice on investments relating to the merits of the transaction and in relation to which the rules on assessment of appropriateness do not apply.”