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Liberty SIPP enters administration

30 April 2020

The FSCS has announced it is now dealing with compensation claims against Liberty SIPP Ltd, as the company entered into administration this week (27th April 2020). 

Why are Liberty SIPP in Administration?

It is reported that the firm were advised they were insolvent based on the binding decisions already upheld by the FOS  in respect of compensating clients. 

In 2018 it was reported that the Financial Ombudsman Service had received over 500 claims against Liberty SIPP. 

That was the same year Liberty SIPP sold its business and client’s assets to EBS – part of the Embark group – and rebranded the Liberty SIPP as the Options SIPP. However, the sale did not include its liabilities, such as compensating clients.

Why are people claiming against Liberty SIPP Ltd?

These claims relate to customers who transferred their pensions into the Liberty SIPP; which contained high risk unregulated investments. These include GAS Verdant, Ethical Forestry, Global Plantations. Some of these investments have since become illiquid.

These cases are challenging Liberty SIPP Ltd on their due diligence.

What is due diligence?

In this case, due diligence suggests the level of care Liberty exercised when accepting new business. For example, did they check the suitability of these non-standard investments for a SIPP and act on any potential issues?

Why did people transfer into Liberty SIPP?

Transferring your pension into a SIPP isn’t always a bad thing. It all depends on the investments involved and any benefits you may have given up as part of the transfer.

Many Liberty SIPP cases involve Avacade – an unregulated introducer company. They reportedly cold called people to discuss transferring their pension, in this case, into investments with Liberty SIPP.  

 Avacade are currently in a high court case regarding their pension report service.

What can I do if I transferred into Liberty SIPP?

It’s only in recent years that claims against SIPP providers for their part in pension mis-selling have thankfully started being upheld. Previously it was mainly about the regulated advice people had received. 

For those who did transfer their pension into Liberty SIPP  they may initially have to pursue a complaint against the adviser.

The FSCS states on its website that “To consider claims against a failed firm, FSCS must be satisfied that customers have first exhausted any right to claim against any connected firms that are still trading.”

The amount of compensation the FSCS can award is a maximum of £85K. 

Need some help?

If you’d like some help – we offer a free telephone assessment to check if there’s a case. We’ll give you more information on making a claim, including making the claim yourself. 

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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.