Fos prepares to refer claims to FSCS after latest Sipp collapse

Fos prepares to refer claims to FSCS after latest Sipp collapse

The Financial Ombudsman Service has about 140 cases against a newly collapsed self-invested personal pension provider, which will be referred to the Financial Services Compensation Scheme if clients consent.

In its initial investigation the Fos found Forthplus Pensions had not undertaken adequate due diligence before accepting business from some advisers and therefore had not treated its customers fairly and reasonably.

Forthplus provided Sipps to approximately 2,500 customers of which many were UK expatriates. The value of assets under management at the date of the administration was £500m.  

The Fos said the majority of the complaints concerned introductions from financial advisers based in the Czech Republic and Cyprus. The Sipps were invested in offshore investment bonds mostly based in Bermuda or Mauritius, which were invested in a variety of funds.

The Fos had issued a number of “representative provisional assessments” which found that Forthplus had failed in its oversight in preventing advice firms from acting outside of their permission levels.

But Forthplus did not agree with these assessments and submissions were made in return and the Fos was preparing to issue a number of final decisions.

A letter to investors from the administrators dated October 20 stated: "Although these final decisions have not yet been issued, if the complaints had ultimately been upheld it could lead to a number of further claims against Forthplus."

Administrators from Leonard Curtis Business Solutions Group were appointed earlier this week (October 19) after the provider fell into trouble due to it being unable to renew its PI insurance.

The administrators are currently assessing the options available to them regarding the transfer of customers to an alternative FCA regulated Sipp administrator.

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