View more on these topics

Embattled Sipp provider sold as court judgment looms

Business-Handshake-General-Hire-Appointment-700x450.jpgAim listed pensions provider STM Group says it has agreed to pay up to £400,000 to buy a majority stake in embattled Sipp provider Carey Pensions.

An update from STM this morning says it will acquire Carey Administration Holdings, which owns 70 per cent of Carey Pensions and 80 per cent of Carey Corporate Pensions, subject to regulatory approval.

The announcement ends the search for a buyer of Carey Pensions, which is currently waiting for a crucial court ruling over allegations it missold a Sipp to a client.

Carey Pensions claimed it did not break conduct of business rules when it set up a Sipp for a client during a High Court hearing in March. In the case lorry driver Russell Adams alleges Carey Pensions missold him a Sipp in February 2012, when he was paid an inducement of £4,000 into his savings account to encourage him to put money into rental scheme Store First.

The case is seen as a pivotal ruling on whether Sipp providers should take responsibility for unsuitable investments.

STM says it has secured indemnities and significant existing professional indemnity insurance cover from Carey, and believes its exposure to the court ruling and any other historic industry issues to be minimal.

Carey’s Sipp business has over 4,000 members and is expected to deliver revenue of approximately £1.8m for the year ending 31 December 2018.

STM Group chief executive Alan Kentish says the integration of two similarly sized Sipp businesses will make the enlarged Sipp group more efficient and help it offer niche Sipp products to the UK market.

The deal will enable STM to enter the auto-enrolment market via Carey’s workplace proposition, which is expected to deliver revenue of approximately £1.5m for the financial year ending 31 December 2018.

Kentish adds Carey’s auto-enrolment business is particularly interesting given consolidation and the cost of entry being prohibitive to new entrants as all auto-enrolment staging dates have now passed.

The remaining minority interests in the subsidiaries – 30 per cent in the Sipp business and 20 per cent in the AE business – are held by the existing Carey Pensions chief executive Christine Hallett.

She has entered into an option agreement with STM for them to acquire those minority interests on a pre-agreed basis. The option agreement is valid for three years and will allow STM to become the 100 per cent owner of these subsidiaries once triggered.

Hallett told Money Marketing the deal will not be affected by whatever the court’s ruling says as STM has done thorough due diligence on Carey.


Carey Pensions up for sale as losses grow

Carey Pensions has put itself up for sale as it reports losses for the second year in a row. According to its annual accounts published last week losses have risen due to a number of legal cases relating to some historic business that is now being wound down. In 2016 the embattled Sipp provider recorded […]


Carey Pensions launches auto-enrolment scheme with 1.05% default charge

Carey Pensions has launched an automatic enrolment pension scheme with a total default fund charge of 1.05 per cent – 30 basis points higher than the 0.75 per cent cap due to be implemented in less than a year’s time. The Islamic Bank of Britain issued a press release this morning announcing it had accredited […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. So STM will get a bunch of investors who are trapped in SIPPs holding Store First and other unregulated junk. STM will be able to drain any cash or liquid funds that they didn’t invest into UCIS via charges indefinitely. And they can charge whatever fees they like because the investors can’t transfer out until the junk is finally liquidated.

    Meanwhile the liability will be dumped on the FSCS.

    Yum yum. Lovely bit of business.

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 advice.

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