Black Star Wealth Management Ltd were established in 2008 and based in the Midlands.
They were declared in default by the FSCS in January 2020, following 99 complaints made to the Financial Ombudsman Service.
The FSCS usually declares a company in default when they are satisfied there’s a valid claim and that the company is unable to return money to eligible customers.
Many of these complaints involved pension transfer advice given to clients to move their pensions into SIPPs.
Unfortunately, these SIPPs held high-risk investments, which aren’t usually recommended for the average SIPP investor.
One investment was German Property Group (GPG) previously called Dolphin Capital/ Dolphin Trust.
This investment to develop unlisted buildings in Germany promised high returns, but actually caused significant losses to UK pension investors. GPG/Dolphin is currently undergoing bankruptcy proceedings in Germany.
Other high-risk, unregulated investments include Best International – Lateral Eco Park, Colonial Capital Bonds, as well as DFM Beaufort Securities.
In 2017 the FCA had placed restrictions on Blackstar Wealth Management, preventing them from carrying out pension transfer business without FCA consent. In 2016 they instructed them to immediately terminate all relationships with introducers associated with non-standard assets.
It’s been reported that Blackstar Wealth accepted business from Introducer firm Avacade. The Directors of Avacade had been involved in a court case with the Financial Conduct Authority. The FCA alleged that Avacade carried out regulated activity without proper authorisation, as well as making “misleading statements” to customers.
This mainly involved the promotion of unregulated investments, which led to hundreds of investors transferring millions of pounds into SIPPs.
The court didn’t agree and found their actions unlawful. They were fined £10m.
In August 2019, Blackstar Wealth entered Administration and the company liquidated in July 2020.
It’s been reported that the FSCS had already paid 4.4m in compensation to Blackstar Wealth Management clients.
Whilst each case is individual, as pension mis-selling specialists we know to look for certain signs that in our experience indicate that SIPP mis-selling may have happened.
Our assessment is free and there’s absolutely no obligation to use our service if you have case.
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.