The Financial Services Compensation Scheme has declared self-invested personal pension operators Stadia Trustees, Brooklands Trustees and Montpelier Pension Administration Services in default.
The lifeboat fund has received around 150 claims for compensation relating to the three businesses. Those claims relate to how the businesses set up, operated and administered Sipps through which people invested in storage pods, oil fields, diamonds and overseas property.
Stadia Trustees stopped accepting new business in 2013 after the FCA changed its regulatory permissions.
Wealth manager Mattioli Woods was appointed in 2016 to wind-up the Sipps for Stadia Trustees customers. Under the terms of that deal, any investor that did not provide a specific instruction otherwise was transferred to a Mattioli Woods default arrangement. If an investor decided to choose another provider, Mattioli Woods would facilitate the transfer.
The firm estimates around 1,000 people were involved in the switch to Mattioli Woods. It estimates as many as 80 per cent had some exposure to non-standard assets, with more than half having all of their pension funds invested in these.
Mattioli Woods chief operating officer Mark Smith says: “Some members have had to endure an extended period of uncertainty about whether their pension assets were ever going to have any value. We are delighted that this arrangement will enable them to get back some or all of the money they have lost as a result of the transfer of their pension benefits from other existing pension arrangements to high-risk investments.”
Curtis Banks acquired the assets and clients of Montpelier Pension Administration Services in 2011. Montpelier has not been authorised by the FCA since October 2011.
Brooklands Trustees is listed on the FCA register as being authorised but in administration. That status has applied since 2007, according to the register.
Heritage Pensions was appointed as the new operator of the Brooklands Sipp in August 2016.
FSCS chief executive Mark Neale says: FSCS steps in to protect consumers around the UK when authorised financial services firms fail. We are satisfied in these cases that certain claims are eligible for compensation, and expect to receive more claims of this nature in the coming months. We will be getting in touch with customers of these firms as we may be able to help.”
The FSCS declared 15 companies in default during November and December 2017, including Welsh advice firm Park Grove Financial Management, which had its permissions cancelled in 2016.