View more on these topics

FSCS warns providers on the hook for Sipp due diligence failures


The Financial Services Compensation Scheme has warned providers they may have to meet the cost of future claims where they have accepted Sipp business from unauthorised introducers.

In its plan and budget for 2017/18, the FSCS says where claims relate to Sipp due diligence failures, where there is a legal responsibility and if claims are eligible these would fall on the investment provider class.

The document says: “Although we have not made any allowances at this time, the FSCS has received a number of claims against Sipp operators in relation to due diligence failings.

“The FCA has previously highlighted concerns in the Sipp market where operators have accepted business from non-authorised introducers. Should the FSCS be satisfied that a legal liability arises and these claims are eligible, the costs in relation to these claims would come under the investment provision class.”

The FSCS announced earlier today it would be refunding investment advisers £50m, while levying an additional £36m on advisers and the wider industry to pay for poor Sipp advice.

In the plan and budget, FSCS chief executive Mark Neale says the focus for the organisation will be on improving customer service and achieving better value for money. This will include a reduction in headcount by 6 per cent by March 2018, and a review of its outsourcing strategy.

The FSCS’s management expenses levy, to cover the organisation’s running costs, has been proposed at £69.2m for 2017/18, compared with £67.4m this year. The FCA and Prudential Regulation Authority are consulting on this levy.



No answers from FOS on Berkeley Burke one year on

You might have missed it, but last week was a year since the Financial Ombudsman Service agreed to review a complaint upheld against Berkeley Burke Sipp Administration. The original decision found that Berkeley Burke had failed to carry out adequate due diligence on a £29,394 unregulated collective investment scheme. But after the initiation of judicial […]


Ombudsman to boost legal role after Royal London scam case

The Pensions Ombudsman is to take a bigger role in pensions disputes that reach the courts,  including pension liberation and auto-enrolment, after a controversial decision on a pension transfer. Currently the ombudsman can be party to an appeal though it is does not have a right to. But Ombudsman Anthony Arter wants to take a more […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm