The Financial Services Compensation Scheme is struggling to collect information from third parties to determine whether there are any valid claims against self-invested personal pension provider Pointon York.
The FSCS said it was still trying to determine whether there were any valid claims against Pointon York and that it was working with third parties - including Sipp provider Curtis Banks, the previous insolvency practitioner and the previous directors - to collect as much information as possible.
But the scheme has not yet been able to get documents from any of the third parties relating to the amount of due diligence done by Pointon York on the investments it made for its customers.
The FSCS said that without this evidence it was difficult to know if there were valid claims.
Therefore the scheme said it was looking at other ways to see if there are any valid claims, including looking at information it already holds and using other contacts to collect this evidence.
FTAdviser understands it is not unusual that after a company has failed for there to be challenges obtaining the relevant documentation.
The FSCS started accepting claims against Pointon York in July, after the company went into liquidation in November 2018.
Claims submitted to the FSCS against Pointon York relate to the Sipp operator's due diligence obligations in allowing customers to make specific investments through their pensions.
But before claims can be passed to the FSCS’ claims processing teams for assessment, the scheme must establish whether there were protected claims against Pointon York.
For this to happen it has to be established in law that the company owes something to its customers.
The FSCS said it was aware that “some Pointon York customers were advised by independent financial advisers to transfer existing pensions into a Pointon York Sipp”.
Following this transfer, clients had their funds placed in high risk, non-standard investments, some of which have become illiquid.
The FSCS has already assessed and paid a number of claims made against IFAs it had already declared in default, in relation to advice customers received to transfer their pension into a Pointon York Sipp.
Curtis Banks bought Pointon York’s Sipp book for an undisclosed sum in 2014.
Speaking to FTAdviser at the time, Paul Tarran, finance director at Curtis Banks, said the deal meant 7,000 schemes came across to Curtis’s books from Pointon York.
Sipp providers have recently been put under the spotlight for their lack of adviser-style due diligence on clients’ investments.
Several cases are still being contested in court but one of the most prominent ones ended earlier this month.
The administrators of Berkeley Burke Sipp dropped its appeal after failing to get sufficient backing to cover the potential cost.
The appeal was in relation to a High Court judgement handed down last October in which Mr Justice Jacobs held a Sipp provider could not rely on a perceived duty to carry out business as requested by the client without considering the outcome for the client in line with FCA client protection rules.
He said there were instances when a Sipp operator should intervene before accepting business, including when the Sipp provider has learnt of problems which affect the proposed investment, or those promoting the investment.
amy.austin@ft.com
What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know
