Financial Services Compensation Scheme  

FSCS declares 30 advice firms in default

FSCS declares 30 advice firms in default

The Financial Services Compensation Scheme has declared 45 firms in default, including 30 advice firms.

In an update published today (November 9) the FSCS confirmed 45 firms had defaulted with the lifeboat body between March and October, including two self-invested personal pension providers and 30 firms operating in the financial advice sector.

Included on the list was Swansea-based adviser S&M Hughes Limited, trading as Crescent Financial, which the FSCS started accepting claims against after finding evidence it may have given poor advice to British Steel clients.

Crescent was one of several firms which advised steelworkers to transfer out of the British Steel Pension Scheme (BSPS) and into personal pensions, instead of opting for BSPS II or the PPF.

In August, the FSCS had received 31 claims against the firm.

Another advice firm in hot water over its pension advice was Kingsway Wealth Management.

Last month (October 28), the FSCS told FTAdviser it had paid out more than £1.7m paid on 35 claims regarding pension-switching.

Kingsway entered administration in December last year, embroiled in claims linked to work carried out by its appointed representative Pension Transfers Limited.

Other advice firms featured on the list were JP Financial Management, Stargate Capital Management, Intuitive Associates Limited, Connected Financial Services and Opes Financial Planning.

Sipp providers

Sipp provider Pointon York was declared in default in June 2020 after the lifeboat scheme began accepting claims against the provider in July 2019 following its liquidation in November 2018.

In September, the FSCS had paid out £355,000 on 10 claims against the provider but £15m against IFAs who had recommended the company's product to clients.

Curtis Banks bought Pointon York’s Sipp book for an undisclosed sum in 2014, which saw 7,000 schemes move to the new provider’s books.

Another provider which featured on the list was Guinness Mahon which defaulted last month (October 29).

As of September 28, the lifeboat scheme had received more than 1,000 claims.

Guinness Mahon entered administration in February but was immediately sold to Hartley Pensions for an undisclosed sum.

Caroline Rainbird, chief executive of the FSCS, said: "Because these firms are unable to pay back the money they owe their customers, FSCS can step in and pay them compensation. 

“As chief executive, I see first-hand the important role FSCS plays to help people who have lost money through their dealings with financial services firms that have failed or are no longer trading.

"The impact of their financial loss shouldn't be underestimated. People who claim through FSCS are often vulnerable. We treat each person with empathy and understanding as their claim is progressed."

The defaulted advice firms are:

  • Kingsway Wealth Management Limited
  • Marshall James & Company Financial Management Services
  • Acorn Financial Solutions (Wessex) Limited
  • Capital & Income Solutions Ltd 
  • Direct Mortgage Centre
  • Financial Solutions Midhurst Limited
  • Halebarns Financial Planning Ltd
  • JP Financial Management Ltd
  • Pentagon Capital Management Plc
  • Rabrose Mortgage Services
  • Stargate Capital Management Limited
  • Opes Financial Planning Ltd
  • O'Toole & Associates LLP
  • PS Employee Benefits Limited
  • Multicorp Rose Limited 
  • R J Boorer and Associates Limited
  • S & M Hughes Limited 
  • Square Seven Financial Planning LLP
  • A Luckhurst & N Shaw 
  • Agincourt Financial Limited
  • Baronworth (Investment Services) Limited
  • Connected Financial Services Ltd
  • Courtover Investment Management Limited
  • DNG Financial Solutions Limited
  • Hopper & Co (Scotland) Limited
  • Mulbury Hamilton Financial Management Limited
  • REX Financial Services LLP
  • Wellington Financial Management Limited
  • Independent Financial Services
  • Intuitive Associates Limited 

amy.austin@ft.com

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