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FSCS considers payouts for HD Administrators Sipp investors


The Financial Services Compensation Scheme is reviewing the claims of investors in HD Administrators, the company which operated a Sipp linked to the collapsed £60m Arck property investment vehicle.

The FSA censured and banned HD Administrators partner Michele King in November last year for failing to fulfil her regulatory responsibilities.

In March 2012, Money Marketing revealed the FSA had suspended HD Administrators’ permissions, preventing it from operating and paying out any funds.

Many investors used their pension savings to invest in Arck through HD Sipp. Arck entered liquidation last year.

In June, pensions and wealth management firm Mattioli Woods announced that it had been appointed administrator for HD Sipp, which has around 40 active members.

In an update on its website, the FSCS says: “FSCS is currently considering whether we will have a role to play in paying compensation to clients of the firm. 

“FSCS is reviewing whether the firm is liable for investors’ claims and will need to consider the investigations of other interested parties, such as the administrator and Serious Fraud Office.

“FSCS will provide a further update as soon as the position is clearer. At that time we will also confirm any claims process for clients of HD Administrators LLP who have not yet made a claim to FSCS.”

Informed Choice managing director Martin Bamford says: “It is incredibly frustrating that the stupidity of a Sipp firm could once again push up the FSCS bill for advisers.”


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

  1. This is quite a complex topic because of the interlinked nature of HD/Arck.

    In theory HD was just providing a route for pension investors to invest in Arck and therefore its a moot point point whether it should be in the chair for a failed UCIS.

    Arck itself was a failed UCIS and unless investors can get something off their IFAs, then its no business of the FSCS.

    But back to the HD connection, there is teh minor issue of the misrepresentation HD conducted to conceal the failed nature of Arck with the production of the bank statements which implied limited funds had been forwarded to Arck when all by £25 had.

    We can’t yet call it outright fraud, but isn’t that exactly what the FSCS IS for, as opposed to bailing out IFAs who are often unfairly blamed for putting ridiculously unreasonable clients into equity funds which do not always only go up?

  2. “It is incredibly frustrating that the stupidity of a Sipp firm”

    It would be far more accurate if “stupidity” was replaced with “greed”!

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