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Adviser faces major claim over Lifemark

Leeds adviser Lampott is facing a big compensation claim after recommending a £5.25m small business pension scheme to invest £2m in Keydata life settlement vehicle Lifemark.

Precision engineering firm Micro Metalsmiths, which employs 120 people, currently has 50 ex-employees drawing from the scheme. Lampott is expected to fight the claim on the basis that it did not decide on the proportion of the client’s portfolio that was invested in Keydata.

The Financial Services Compensation Scheme recently announced that it will cover Lifemark losses up to its £50,000 limit.

An FSCS spokesman confirmed that pension trustees may be granted the right to submit multiple claims on behalf of their members, where the total size of the scheme is above the limit.

Lampott IFA adviser Richard Lamborn says: “This is going through our claim procedure and it would not be appropriate for us to comment at this time.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Interesting, hadn’t thought about this properly but how can you when you don’t have the file in front of you?

    The company should sue the trustees and I wonder how the FSCS can decide to pay out to individual pensioners, isn’t is subject to other legislation?

    Regulatory arbitrage?

  2. Interesting…….the FSCS prepared to break their own rules (claims on behalf of a trust are treated as a single claim rather than per beneficiary and therefore subject to the £50,000 limit) because it is high profile and will make good headlines.

    I am sure there are lots of less publicised claims where the FSCS stuck to their rules and paid out a lot less than was lost by using this trustee/beneficiary disctinction.

    And why the FSCS paying out at all? Lampott still exist and are liable for the advice given (irrespective of how much was paid in – if it was sound advice it was good for a £1 investment or a £5m investment) and should be forced by the FSA to pay compensation.

    Oh, yes I forgot. That would mean the FSA would have to get off the fence and make a decision quickly……..

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