The Financial Services Compensation Scheme has declared 14 firms in default in January and February, including nine advice firms.
In an update published today (March 4), covering the first two months of the year, the FSCS said Manchester-based Copia Wealth Management had defaulted with the FSCS on January 6 after being placed into liquidation in September last year.
By January, the FSCS had received 149 claims against the firm relating to Sipps, investment bonds, investment portfolios, private pension transfers and other pension advice.
It came after the Financial Ombudsman Service rebuked Copia last year over its defined benefit transfer advice.
The ombudsman found Copia had incorrectly assessed a client as wanting to take high risk investments when deciding to go ahead with a defined benefit transfer, which saw him take £10,000 tax free cash and invest the remaining sum of £34,000.
Another advice firm in hot water over its pension advice was Pembrokeshire Mortgage Centre, one of the advice firms that gave up its transfer permissions in the wake of the British Steel pension scandal.
The firm, which traded as County Financial Consultants, was placed in default on January 14 and from January 19 the FSCS had received 35 claims against it.
Pembrokeshire Mortgage Centre went into liquidation in September 2020. In 2017 the firm had voluntarily pulled out of the pension transfer market and in April 2018 it left the pension market entirely.
Other advice firms featured on the list were Inspired Wealth Limited, Sterling Pension Management Limited and RHT Financial Services Limited.
Sipp provider
Also appearing on the list was Sipp provider Liberty Sipp which was placed in default on January 25.
Last week, FTAdviser revealed the lifeboat scheme has so far paid out more than £5.8m in compensation on 187 claims but in total has received 1,860 claims against the firm.
Liberty Sipp was advised to enter administration in April last year due to the number of claims it received relating to high-risk non-standard investments.
The Liberty Sipp Limited business and customer assets were sold to EBS Pensions Limited, part of the Embark Group, in October 2018, which then rebranded the Liberty Sipp as the Option Sipp.
However, the legal entity Liberty Sipp Limited was not part of the sale and retained its liabilities. It consequently had to pay out against complaints using the assets it held.
Sarah Marin, FSCS's interim chief customer officer, said: "FSCS puts customers and their need for trust in financial services first.
“This focus is needed more than ever, with the increased potential for financial vulnerability as a result of the pandemic.
“FSCS's protection increases consumer confidence when buying financial products and services, and our compensation helps put customers back on track if firms should fail.”
The defaulted advice firms are:
- Inspired Wealth Limited
- Copia Wealth Management Limited
- Grosvenor Financial Consultants Limited
- Pembrokeshire Mortgage Centre Limited
- RHT Financial Services Limited
- Gardner Massey Wright IFA Limited
- Sequence Financial Management Limited
- Sterling Pension Management Limited
- John Coldwell Pensions & Investments Limited
amy.austin@ft.com
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