The Financial Services Compensation Scheme has received 2,844 claims against 116 firms for their advice to transfer to, or take out, Rowanmoor pension products.
The statutory body told FTAdviser 2,400 of these claims have been upheld, 278 rejected, and 166 are still in progress.
CIB Life & Pensions Limited, the introducer firm key to the downfall of Rowanmoor’s £1.4bn self-invested personal pension business, is subject to the bulk of these claims - some 1,190.
CIB was the introducer firm the Financial Ombudsman Service found Rowanmoor had failed to do adequate due diligence on back in January, leading to customers losing thousands via high-risk investments.
But over 100 other advice firms were also complained against in relation to Rowanmoor pension products.
The FSCS sent FTAdviser a table showing the top 20 firms with upheld cases. Archer Bramley Limited, Moneywise Financial Advisors Limited, and The Pensions Office Limited are all subject to 100 or more upheld cases, with more in progress.
Archer Bramley and The Pensions Office went into default in 2015, the same year as CIB. Meanwhile Moneywise went into default a year later.
Another four advice firms were subject to between 50 and 100 upheld complaints - with BlackStar Wealth Management Limited the most recent firm to go into default, in 2020.
The top 20 firms in the table account for the majority of upheld claims against firms relating to advice on Rowanmoor pension products, making up 2,128 of the 2,400 upheld complaints.
Firm Name | Went into Default | Upheld | Rejected | In progress | Grand Total |
|---|---|---|---|---|---|
C.I.B (Life & Pensions) Limited | 09/09/2015 | 1055 | 77 | 58 | 1190 |
Archer Bramley Limited | 10/08/2015 | 261 | 4 | 9 | 274 |
Moneywise Financial Advisors Limited | 20/10/2016 | 180 | 31 | 5 | 216 |
The Pensions Office Limited | 30/09/2015 | 100 | 9 | 5 | 114 |
Anthony William Morrin formerly AWM Financial Services | 24/04/2017 | 84 | 11 | 6 | 101 |
Regency Financial Resources Ltd | 12/02/2016 | 61 | 8 | 9 | 78 |
BlackStar Wealth Management Limited | 14/01/2020 | 60 | 6 | 8 | 74 |
1 Stop Financial Services | 14/07/2014 | 52 | 6 | 58 | |
Gallimore Associates Ltd | 17/05/2016 | 40 | 3 | 1 | 44 |
My IFA Friend Limited | 19/12/2016 | 30 | 4 | 2 | 36 |
Market Place Financial Services Limited | 25/01/2017 | 28 | 5 | 1 | 34 |
Gallimore Associates | 17/05/2016 | 28 | 1 | 29 | |
Serenus Consulting Limited | 11/02/2020 | 27 | 3 | 4 | 34 |
Allen Financial Management Ltd | 04/11/2015 | 25 | 2 | 27 | |
Foreman Financial Services Limited | 07/09/2018 | 20 | 1 | 21 | |
Build your Wealth Ltd | 11/01/2017 | 19 | 8 | 2 | 29 |
Alderley Asset Management Ltd (formerly Bankhall Financial Services Ltd TA Sterling Wealth Management) | 12/11/2014 | 15 | 2 | 1 | 18 |
Precise Advice Partnership LLP | 11/12/2016 | 15 | 15 | ||
Sage Financial Services Limited (formerly The Investment Alliance Ltd & Hilliard Associates Ltd) | 26/02/2013 | 14 | 3 | 17 | |
DK Consulting (Berkshire) Limited (formerly Plan65 Limited t/a Davidson Rae Financial Management) | 25/03/2021 | 14 | 1 | 1 | 16 |
Totals: | 2128 | 184 | 113 | 2425 |
Source: FSCS
Most of these firms which interacted with Rowanmoor's pension products failed pre-April 1, 2019, therefore the compensation limit is £50,000 for claims against those firms. Post-April 1, 2019, the compensation limit is £85,000.
Questions over amount Lloyds set aside
Adviser platform Embark used to form part of Rowanmoor, but was separated from the pensions operator when Lloyds bought it for £390mn in July 2021.
After the deal was first announced, 214 complaints were received by the Fos against Rowanmoor which are now being handled by the FSCS following the pension operator’s insolvency.
The Financial Conduct Authority approved the sale of Embark to Lloyds in January 2022, leaving Rowanmoor as a separate entity.
The regulator told FTAdviser that before completion of the acquisition by Lloyds, Embark’s board undertook an assessment of potential redress liabilities. It said a provision “close to the upper end” of the calculated range of redress was made into Rowanmoor.
“This provision represented the best estimate of the cost of settling these potential liabilities at the time,” the regulator said.
However Rowanmoor’s board subsequently took further professional advice which concluded the Sipp provider was not able to meet all its future liabilities, leading it to enter administration last week.
The FCA said the provision made by Lloyds and Embark will be used towards potential liabilities.
FTAdviser asked Lloyds how much was set aside to cover these liabilities. The bank declined to comment.
In full-year financial accounts for 2021, published eight months after the Embark deal was first announced, Lloyds said: “Because of the limited time available between the acquisition [of Embark] and the approval of these financial statements, the group is still in the process of establishing the fair value of assets and liabilities acquired.”
Currently, there are 1,013 complaints against Rowanmoor, which have begun transferring over to the Financial Services Compensation Scheme now that Rowanmoor is no longer able to cover all the potential payouts.
This means what is not covered by the provision made by Lloyds and by Rowanmoor to date will be shouldered by the FSCs - including through adviser levies.
FTAdviser approached Rowanmoor for comment.
ruby.hinchliffe@ft.com
