Administrators sell off Berkeley Burke’s Sipp arm

Administrators sell off Berkeley Burke’s Sipp arm

Part of Berkeley Burke has gone into administration but its self-invested personal pension arm has been sold to Hartley Pensions after the company struggled to cover the financial costs of defending claims in relation to alleged due diligence failings.

Yesterday (September 18) the directors of Berkeley Burke Sipp Administration Limited put the company into administration because it could no longer afford to defend redress claims made against it.

Immediately after being appointed, administrators RSM announced that the Sipp arm of the business would be sold out of administration in a pre-pack deal with Hartley Pensions, which has acquired a number of client books from troubled Sipp providers in recent years.

It is not yet known how much Hartley paid for the client book.

A pre-pack administration is an insolvency procedure where a company arranges to sell its assets to a buyer before appointing administrators to facilitate the sale.

Berkeley Burke went into administration because it was unable to cover the financial costs of defending claims made against it in respect of the firm's alleged due diligence failings when accepting high risk investments between 2010 and 2012

The Sipp provider is currently embroiled in a case from 2014, in which the Financial Ombudsman Service ruled it had to compensate a client after it failed to carry out adviser-style due diligence on his investment.

The Financial Services Compensation Scheme is now likely to see a number of claims against Berkeley Burke coming its way following the firms inability to pay out itself.

Clients of Berkeley Burke have been told to direct their claims to the FSCS in the first instance and those who are ineligible to claim through the FSCS, mainly non-personal clients, should submit their claims to the administrators. 

Adrian Allen, one of the joint administrators, said the Financial Conduct Authority had accepted RSM’s appointment as administrator.

Mr Allen said: 'Berkeley Burke Sipp Administration Limited's dispute with the decisions of the Fos, and the level of client claims it is facing, left the firm with no option but to enter administration. 

“The appointment was made after consultation with the Financial Conduct Authority and with their consent. 

“The sale to Hartley will provide continuity of service to the company’s clients and ensure the clients' interests are served whilst delivering the best available outcome for both clients and creditors."

Following the sale, all Berkeley Burke clients will transfer to a Hartley Sipp unless they contact the company to say that they wish to transfer to another Sipp plan of their choice.

According to the administrators, Hartley will be retaining a number of the former Berkeley Burke administration staff based in Leicester to ensure Sipp transfers proceed in an efficient and timely manner.

All other companies within the Berkeley Burke Group will continue to trade as normal and are not affected by the administration of its Sipp business.

Hartley has snapped up a number of failing Sipp firms client books in recent years.

Last month it bought the £130m client book of GPC Sipp, which entered into administration earlier this year after it was embroiled in hundreds of customer claims, and in October 2018 it bought Greyfriars Asset Management's Sipp business for £820,000 after the firm entered insolvency.