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FSCS to payout over FCA censured firm

FSCS to payout over FCA censured firm

The Financial Services Compensation Scheme will pay out on claims relating to an advice firm censured by the Financial Conduct Authority over pension transfers.

Cheltenham-based Bank House Investment Management is one of the 25 firms which the FSCS has just declared in default.

Earlier this year Bank House was told to cease all regulated activity after it broke a voluntary agreement with the regulator.

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The firm reached an agreement with the FCA to cease any activity relating to pension switches or transfers into self-invested personal pensions but carried out 78 transactions anyway.

Among the other advice firms declared in default are Kidderminster-based Financial Planning and Investment Ltd, Leicestershire-based Russell Watchorn Financial Services, Maidstone-based Blue Ocean Financial Services Limited and London-based White House Independent Financial Services Limited.

Since its inception in 2001, the FSCS has helped more than 4.5m people, paying out more than £26bn in compensation.

Mark Oakes, head of communications at the FSCS, said: “The FSCS protects consumers around the UK when authorised financial services firms go bust.

“It protects your deposits, investments, home finance and insurance, and it’s free for consumers to use.

“Our message to anyone who believes they may be owed money as a result of their dealings with any of these firms is please get in touch as we may be able to help you.”

The regulator said it conducted a visit to Bank House in July 2015 where it obtained information about its pension switching business.

As a result of this visit, the FCA stated it had "serious concerns" about the suitability of the firm's pension advice which led to the regulator and Bank House reaching a voluntary agreement.

As well as the ban on any pension transfers to Sipps, including completing any business previously agreed, Bank House had to provide independent verification that there was a "robust and compliant" advice process in place for the ban to be lifted.

The FCA also stated it would require ongoing independent checks to be satisfied the new process was embedded in the firm's processes once the ban was lifted.

It also agreed not to dispose of, deal with or diminish the value of any of its assets without the prior consent of the FCA.

But in August 2016 the FCA became aware that Bank House may have broken the agreement and, after obtaining information from a Sipp provider, discovered it had advised 72 customers on 78 transactions of this sort, with a total value of £2.65m.

During its investigation the FCA also found that customers who were advised by the firm to switch their pensions to the Sipp account offered by the provider were initially sourced and dealt with by an unauthorised firm before being passed to Bank House for advice.