Financial Services Compensation Scheme  

Pension transfer advisers among firms declared in default

Pension transfer advisers among firms declared in default

The Financial Services Compensation Scheme has declared 11 advice firms in default, including two that have fallen foul of the ombudsman over pension transfer advice. 

The lifeboat scheme declared a total of 35 failed regulated companies in default in the three months from August to October, paving the way for consumers to potentially receive compensation. 

Of the advice firms included in the list, two had lost cases at the Financial Ombudsman Service against claims of poor pension transfer advice. 

St Martin's Partners entered into liquidation in June and has lost at least one case at the ombudsman, in which a client brought a claim for losses incurred when he was advised to transfer out of his personal pensions to a newly opened self-invested personal pension. 

The case featured the now failed provider Guardian Sipp and in total St Martin's Partners had arranged a transfer of more than £72,000 from the client's pension plans to be invested in an unregulated overseas agricultural bond. 

Adviser WSW Financial Services also appeared on the latest default list. It is the firm that earlier this year was ordered to compensate two clients who lost their pension savings when they transferred to a Sipp to invest in high risk investment Harlequin. 

An appointed representative of WSW Financial Services had advised 'insistent clients' not to transfer their pension benefits, but they proceeded despite this and invested more than £15,000. 

The FSCS also declared advice firms Valiant Financial Consultants Limited, N-Hanced LLP, AETC Associates Limited, Property Finance Solutions (UK) Limited, Blackstone Independent Financial Advisers, Central Financial Planning Limited, Gerard Associates Limited, and Ron Treherne IFA Limited in default. 

The FSCS will only declare a firm in default if it is satisfied the business cannot pay claims made against it. 

Caroline Rainbird, chief executive of the FSCS, said: "FSCS's role is to help people who have lost money as a result of doing business with an authorised firm if that firm is unable to meet claims made against it.

"The existence of FSCS helps to instil confidence in the financial services sector by ensuring customers can get the compensation they are entitled to when a firm fails.

"This vital service, which is free to consumers, protects deposits, insurance, investments, home finance and debt management." 

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