Troubled self-invested personal pension (Sipp) provider Carey Pensions is looking for a buyer willing to take it on as it battles legal claims from an unhappy investor that could have far reaching consequences for the whole industry.
The company’s accounts, out on 22 May, showed deepening losses associated with legal costs from historic business, which, the firm says, is “now being run down” after a restructuring of its business earlier this year.
In February it became apparent that Carey was regrouping distressed assets into one book, away from its healthy assets, though at the time it denied this was in preparation of a potential sale.
It is understood the assets relate to investments in unregulated products such as store pods, which were made between 2011 and 2013.
In its accounts it states: “Carey Corporate Pensions UK Limited, another member of the group, is currently in negotiations to be sold to a third party. Once this sale has been completed, it is management’s intentions to also sell the company in the near future.”
Carey wrote a £215,226 loss for the year ended December 2017, following losses of £153,784 in the year prior.
It had set aside £70,816 for potential liabilities in 2016, which was carried forward into last year.
The Sipp firm is embroiled in a court case, the outcome of which is expected to be published imminently and could have profound effects on the wider market if lost.
Carey is fighting an investor who argues it had a duty of care towards him when allowing him to set up a Sipp to invest in unregulated investments, despite the sale being classed as execution-only.
Carey argues it is not responsible for the client’s failed investments as he invested on an execution-only basis and signed a contract saying this was his choice.
But the Financial Conduct Authority (FCA), which presented its views in court and is also due to speak at a similar case against Berkeley Burke, maintains a Sipp provider cannot shirk its responsibilities in such a scenario.
In its submission to the latter case, the FCA argued acquiring the assets in a Sipp forms part of operating the Sipp, and under section 22 of the Financial Services and Markets Act 2000 establishing and operating a Sipp as well as buying and selling securities are regulated activities, therefore Principles 2 and 6 apply.
The FCA stated the idea the client is responsible for their own decisions in an execution only set up “cannot be relied on directly [...] as a ground for either setting out any obligation on, or any limitations on the obligations of firms such as Sipp operators.”
Carey has been contacted for comment.
carmen.reichman@ft.com
