18th December 2015
An investigation into self-invested personal pension (Sipp) claims has led to the Financial Services Compensation Scheme (FSCS) paying out £63 million to consumers.
The money was paid out after an investigation into just four firms, with two of the firms having clients heavily invested into overseas property scheme Harlequin.
According to trade magazine New Model Adviser, the FSCS paid out £63.3 million in relation to four firms: 1 Stop Financial Services, TailorMade Independent Limited, Crawford Scott Limited and Kynaston-Carnoustie Financial Consultancy Limited.
All four were declared in default in July 2014 and the majority of the claims have related to 1 Stop – with a total of £30.9 million to date, and TailorMade at £29 million.
Claims against Crawdford Scott have totalled £1.6 million and against Kynaston-Carnoustie have totalled £1.8 million.
Just under half of 1 Stop’s clients, numbering 958, were invested in Harlequin, which collapsed.
The Financial Conduct Authority has already banned 1 Stop’s partners Andrew Rees and Timothy Hughes for giving unsuitable advice to over 2,000 clients on pension switching, valued at £112 million.
The combined fee of £490,000 levied on the pair was paid to the FSCS to help with client redress.