The Financial Services Compensation Scheme has declared four advice firms in default following compensation claims relating to Sipp transfers against them.
The FSCS says it has received an increasing number of claims against advisers that are no longer trading in relation to advice to transfer existing pension schemes to Sipps.
As a result of its investigations into Sipp claims, it has declared the following firms in default: TailorMade Independent, 1 Stop Financial Services, Kynaston-Carnoustie Financial Consultancy and Crawford Scott.
The FSCS says it will begin processing claims against these firms in September, and expects to see more failures of this nature.
In April the FCA banned 1 Stop Financial Services partners Andrew Rees and Timothy Hughes for suitability failings in Sipp advice.
The two men were ordered to pay their £490,100 fine to the FSCS in the first instance of a fine being paid to the compensation scheme.
Tailormade Independent was formerly a distributor of Harlequin Property. In March 2013, the FSA imposed restrictions on Tailormade Independent around the disposal of assets and prevented the firm from carrying out new pensions business.
In the FSCS’s annual report earlier this month, chief executive Mark Neale said he was “increasingly concerned” about the rising number of Sipp claims.
The FSCS received 4,248 claims relating to the life and pensions intermediation class in 2013/14, up by 15 per cent on the 3,691 claims received in 2012/13.
It says this is down to a rise in Sipp claims and continuing, although relatively low, volumes of mortgage endowment claims.