Financial Services Compensation Scheme  

Adviser in default as claims loom

Adviser in default as claims loom

The Financial Services Compensation Scheme has declared a Sunderland-based adviser in default after it found it could not meet the claims against it.

The lifeboat scheme has so far received four claims against WJR Wealth Management Limited, formerly branded Walker Johnston Robinson Limited, and to date has paid out on one self-invested personal pension claim against the firm. 

The adviser was placed into default yesterday (February 3), paving the way for clients to make claims for compensation to the FSCS. 

A spokesperson for the scheme said the other three claims against WJR Wealth Management were still in progress, with the amount to be paid to clients still undetermined. 

The company was dissolved in February 2016 after applying to be struck off in November 2015, according to an entry on Companies House. In January 2015 the company had assets of £70,000 and liabilities of £44,000 falling due within the year.

The growing number of Sipp claims in recent years has been blamed for the increasing FSCS levy on advisers, with the scheme recently warning this trend was set to continue in the near future. 

Earlier this month the FSCS outlined its initial forecasts for the levy and potential claims volumes for 2020-21, with the overall levy estimated to come in at £635m.

This is £87m more than the total for 2019-20 as the lifeboat scheme pointed to increasingly complex and costly pension advice claims. 

Advisers will be expected to pay £213m towards the levy for the coming year, almost 13 per cent more than the previous year.

At the end of last month Sipp administrator Avalon Investment Services was placed into default, with the FSCS paying out £264,000 to claimants to date. 

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