The Financial Services Compensation Scheme is accepting claims against embattled self-invested personal pension provider Guinness Mahon after it fell into administration following a number of claims relating to non-standard investments in its Sipps.
Adam Stephens and Nick Myers of Smith & Williamson were appointed as joint administrators of Guinness Mahon Trust Corporation Limited yesterday (February 17) but immediately sold the Sipp business and certain assets to Hartley Pensions for an undisclosed sum.
This deal will see 4,000 Sipps with a total investment value of £300m transferred to Hartley in due course.
Guinness Mahon entered administration following a raft of complaints about historic high-risk non-standard investments and the alleged lack of due diligence that the provider carried out before accepting these investments into customers’ Sipps.
A Financial Ombudsman Service decision from September 2018 ruled in favour of five clients who in total lost close to £100,000 after investing their pensions in unregulated assets through a Guinness Mahon Sipp.
It was found the provider had opened the Sipps after clients were introduced by Avacade, who is currently embroiled in a £86m High Court battle with the regulator.
Avacade then cold-called clients to recommend they transferred their pensions into unregulated schemes such as Ethical Forestry, the Fos found.
Guinness Mahon sought advice about its liabilities arising from client complaints but its directors were advised that the company was insolvent and should be placed into administration to provide protection for the clients and creditors.
The FSCS is now accepting claims against Guinness Mahon but has not received any to date.
Eligible clients can bring claims to the FSCS up to the limit of £85,000.
The Financial Conduct Authority ( FCA) has warned clients of Guinness Mahon to be “cautious” if approached by claims management companies offering help to bring claims against it.
The FCA stated: “For the vast majority of GMTC’s customers, there is no benefit in involving a third party in making a claim and you will be charged for their services. Any customer who believes they have a complaint against the firm should contact the free to consumer services of the FSCS in the first instance.”
The regulator also warned about the possibility of cold-calls by someone claiming to be from the administrators or Guinness Mahon.
The sale of Guinness Mahon includes the Sipp business, around 4,000 Sipps, and certain assets but does not include the legal entity Guinness Mahon Trust Corporation Limited which remains in administration.
Small self-administered schemes are administered by a separate company called Pan Trustees Ltd, and are regulated by The Pensions Regulator. They are not entering administration.
The assets held within each Guinness Mahon Sipp will transfer to a Hartley Sipp unless clients contact Hartley to say they wish to take up another option.
Adam Stephens, partner at Smith & Williamson and lead administrator, said: “We are pleased to confirm the sale of the business to Hartley, which will provide continuity of service to GMTC’s clients.
“The sale followed an extensive marketing exercise, with multiple offers being received. The sale to Hartley corresponded to the best offer being received for the business.”