FSCS pays out £3m for IFA firm's advice

FSCS pays out £3m for IFA firm's advice

The Financial Services Compensation Scheme has paid out more than £3m in relation to a financial advice firm which faced complaints about transfers into self-invested personal pensions.

A spokesman for the FSCS said that since Blueinfinitas went into default it has paid out more than £3m against 166 claims.

The company, which was based in Weston-super-Mare, was declared in default in December 2015 and is currently in liquidation.

The Financial Ombudsman Service has adjudicated on two complaints against Blueinfinitas in the past three years.

Both of those decisions, which were reached in December 2015 and January 2016, related to transfers into self-invested personal pensions.

One related to a man who was advised to transfer £64,000 into a Sipp, investing £33,000 in an unregulated property investment called Windermere Hydro Hotel while the other saw £57,000 transfered into a Sipp and £29,000 invested in an unregulated property fund.

In both cases the complaints against Blueinfinitas, which also traded as Dominic James Barry, were upheld.

In January the FSCS predicted the total number of claims it receives will fall next year following a recent spike, but it warned the trend of increasing numbers of complex life and pensions cases will probably continue, resulting in "materially higher" costs.

Claims from the life and pensions class are expected to be so high that they will exceed the class's annual threshold, meaning the FSCS will have to call on spare funds from the retail pool which all levypayers contribute to.

The increase in life and pension claims is due to the number of cases relating to self-invested personal pensions, and advice given to invest funds in high-risk, non-standard assets through the pension wrapper.