Financial Services Compensation Scheme  

FSCS tells Forthplus clients to bring claims against their IFAs

FSCS tells Forthplus clients to bring claims against their IFAs

The Financial Services Compensation Scheme (FSCS) is encouraging clients of defunct Sipp provider Forthplus Pensions to bring claims against their financial advisers.

In an update yesterday (January 10), the lifeboat scheme said it was aware that some Forthplus clients were advised by IFAs to transfer existing pensions into the Forthplus Sipp. 

It is now telling people to submit a claim to the FSCS against the advisers, rather than the Sipp provider.

The FSCS stated: “FSCS considers different factors when calculating losses on pension advice (a claim against your financial adviser) compared to claims against Sipp operators (a claim against your Sipp provider).

“This means you may be eligible to receive more compensation for any losses by claiming against your financial adviser than if you just made a claim against your Sipp provider. So we recommend submitting a claim for compensation to us against your IFA first.”

Forthplus Pensions appointed administrators in October after it was unable to renew its professional indemnity insurance (PII).

FTAdviser later revealed, that as of October 21, the Fos had about 140 cases against Forthplus Pensions, which would be referred to the FSCS.

The lifeboat scheme currently has 192 claims against the provider but these will not immediately be passed to its claims processing teams for assessment. 

This is because the FSCS first needs to establish whether the claims are eligible under its rules. 

It said it is currently investigating this, but it may take some time.

At the end of last year (December 15), iPensions bought the book of business from Forthplus Pensions for an undisclosed amount.

As iPensions bought just the clients and not the company, the claims remain the responsibility of Forthplus Pensions.

One of the advisers the FSCS is accepting claims against in relation to Forthplus is Planet Pensions, previously known as Square Mile Financial Services, which went into liquidation in July 2020.

Customers have alleged that Planet Pensions gave them unsuitable advice in connection with pension transfers into and from several pension schemes, including the Forthplus Sipp and the Optimus Retirement Benefit Scheme, a Qrops based in Malta. 

As Forthplus Pension is now in administration and the FSCS has decided not to redirect customers to Integrated-Capabilities or Optimum Pension Administrators, the trustees and administrators of the Optimus Retirement Benefit Scheme, it can accept claims against the adviser.

The FSCS stated: “FSCS is now accepting customers’ claims against Planet Pensions involving advice in connection with pension transfers into and from the Forthplus Sipp and The Optimus Retirement Benefit Scheme.

"FSCS will investigate whether these claims against Planet Pensions are eligible for compensation under our rules. “

The FSCS currently has three claims against Planet Pensions.

amy.austin@ft.com

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