The Financial Services Compensation Scheme has put troubled self-invested personal pension provider Pointon York in default after it received eligible claims against it.
Pointon York was declared in default on Friday (June 19) with the lifeboat scheme having received around 100 claims for compensation against the provider.
It is now yet known how much the FSCS is expecting to pay out on claims.
A declaration of default means FSCS is satisfied a firm is unable to pay the claims for compensation made against it and that at least one claim received is eligible.
The FSCS started accepting claims against Pointon York in July, after the company went into liquidation in November 2018.
At first the lifeboat scheme struggled to establish whether valid claims existed against the provider after it found it difficult to collect evidence from third parties relating to the amount of due diligence done by Pointon York on the investments it had made for its customers.
However FTAdviser understands it is not unusual for there to be challenges in obtaining the relevant documentation from a company that has failed.
The FSCS also 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.
The FSCS has already paid out on a number of claims against IFAs in relation to advice customers received to transfer their pension into a Pointon York Sipp.
Curtis Banks bought Pointon York’s Sipp book for an undisclosed sum in 2014.
Speaking to FTAdviser at the time, Paul Tarran, finance director at Curtis Banks, said the deal saw 7,000 schemes come across to Curtis’s books from Pointon York.
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