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May 18, 2023

Eleven firms currently under FSCS investigation

It’s been a busy year so far for the Financial Services Compensation Scheme. The lifeboat organisation has declared 27 firms in default since the start of the year.

And there are eleven firms that the FSCS is currently investigating…

Firms under investigation with links to BSPS claims

Wealthmasters Financial Management Ltd (FRN: 536087) and Green Gem Financial Ltd (FRN: 400488) have been under investigation since 14 March 2023.

According to the FSCS both of these firms are associated with claims regarding the British Steel Pension Scheme (BSPS).

The British Steel Pension ‘debacle’ saw thousands of BSPS members given unsuitable pension advice to transfer to defined contribution pensions. These are also known as a Personal Pension Plans or Self-Invested Personal Pensions (SIPP).

But these two aren’t the only firms on the investigation list with connections to BSPS claims…

Abbey Lane Financial Associates Ltd (FRN: 649170), D C Financial Ltd (FRN:170299) and Arrow Financial Services UK Ltd (FRN: 528826) are also companies associated with claims regarding British Steel pensions. That’s according to the FSCS website.

And Prism Independent Financial Advisers, which appointed liquidators in December 2020, joined the list on May 17th 2023.

Arrow Financial Services UK Ltd, also trading as Arrow Asset Management, was dissolved on 22 June 2022.

Abbey Lane Financial, D C Financial Ltd, Green Gem Financial Ltd and Wealthmasters Financial Management Ltd are all currently in liquidation.

There may also be claims made against these firms that are not connected to BSPS but may involve unsuitable pension advice.

 

Other firms currently under investigation by the FCSC

WealthTek LLP (FRN: 832264) provided discretionary, advisory and execution only services to retail clients and was placed under investigation on April 6th.

This was also the date that the Court appointed Joint Special Administrators of WealthTek following an application by the FCA.

According to the FSCS the Joint Special Administrators will be contacting all customers shortly. Clients can also find more details on the FCA website.

The FSCS has said it will not be open to customer claims at the moment. It is “investigating whether there are any claims that are eligible for compensation and how any claims might best be dealt with.” Clients can expect further updates as they become available.

 

Haich & Associates (UK) Ltd (FRN: 791582) was placed under investigation on 13 April 2023.

The FSCS said it has received claims in relation to the firm’s activities as ISA manager and its role in arranging customers’ investments. It added that the investments include bonds in BoxVn Ltd and NQ Minerals plc.

 

Nexus Independent Financial Advisers Ltd (FRN: 584769) was placed in administration on January 26th2023

The FSCS placed the firm under investigation in April 2023 and confirmed it is now accepting claims.

It clarified that at present it is working closely with the Administrators while it investigates whether customers who have submitted claims to FSCS are eligible for compensation under its rules.

The FSCS said that until it has finished its investigations, it’s unable to say whether it will be able to pay claims against Nexus Independent Financial Advisers Ltd.

 

Gaudi Regulated Services Ltd (FRN: 488015) was a SIPP operator that also provided and administered white label’ SIPPs. These could be branded and modified to suit other firms, referred to as business partners.

Gaudi entered administration on April 25th 2023, but shortly before it did, it sold its book (assets & customers) to Platform One Ltd.

The FSCS placed Gaudi Regulated Services under investigation on April 26th and said that it is open to customer claims. However, it first needs to establish whether there are claims that are eligible under its rules.

The FSCS is currently still investigating this, and said it is likely to take it some time.

It anticipates it will be ‘a complex investigation’ given the number of business partners who used Gaudi white labelled SIPPs, as it will have to consider each one in turn.

 

Pello Capital (FRN: 449720) was placed under investigation on 9th May 2023. It was a wealth management firm that provided a range of services including stockbroking, online share dealing, foreign exchange trading, corporate broking and pensions.

Its directors placed the firm into creditors voluntary liquidation on 14 December 2022, following action taken by the FCA which stopped the firm from conducting regulated activities. It also restricted Pello Capital from disposing of assets.

The FSCS is accepting claims against the firm but until it has finished its investigation, the FSCS cannot confirm if it is able to pay compensation to any customers who submit claims against Pello Capital ltd.

What happens next?

If a regulated financial firm is no longer trading and can’t pay a customer’s claim, the FSCS can step in to pay compensation to clients.

To allow the FSCS to do this it must determine that the firm is in ‘default’ which is why the FSCS investigates some firms.

To declare default the FSCS must be satisfied there’s at least one claim eligible under its rules and that the firm is unable or unlikely to pay the compensation.

For example, if a firm has failed and entered an insolvency process such as administration or liquidation.

The FSCS can only pay compensation for financial loss and has limits to the amount it can award.

You can find more information on failed firms on our dedicated page or visit the FSCS website.

Or if you think you think you may have been affected by pension mis-selling but not sure – our free initial assessment could help. Call or fill in the form to arrange a chat with one of the team and found out if you may have a case.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.