Consumer Wealth, a financial advice firm who have received complaints about pensions, has recently gone into liquidation, with a list of 13 complaints against them made to the Financial Ombudsman Service.
Having appointed RSM Restructuring as administrators, they now face a testing time, with only one of the complaints against them having been decided on.
That decision was published by the FoS in December, relating to an investment in a fund run by Greyfriars Asset Management, a fun that had seen its permissions restricted by the Financial Conduct Authority before it became insolvent. The successful complaint was made by a client referred to as Mr F, a client who had been advised to switch two personal pension plans, totalling nearly £58,000, over to a SIPP.
Consumer Wealth gave the recommendation that he should invest 49% of the SIPP funds into an equity fund and another 49% into the GAM Portfolio Six fund. The 2% of the funds which remained were held as cash.
On investigation, Ombudsman Keith Taylor identified that the GAM Portfolio Six fund consisted of “niche” investments, including overseas hotel rooms, development of grade-listed buildings in Germany, as well as a waste treatment and energy recovery location in Wales.
Mr Taylor stated: “These niche investments offer relatively high returns which generally is an indicator of the underlying investment risk. These investments were also unregulated and I wouldn’t expect to see this proportion of a pension fund invested like this. So, whilst the investments had been amalgamated into a single fund, I don’t think it makes it suitable to investment virtually half of Mr F’s pension in a fund like this.”
Greyfriars’ advisory arm was purchased by Insight Financial Associates for around £440,000 during 2018, with the company’s SIPP business also sold, in this case to Hartley Pensions. It was found that Greyfriars Asset Management operated as a wealth management business that, in addition to the divisions that were sold to Insight and Hartley, had also provided a range of discretionary fund management services.
It should be stated that this division began its wind down in 2017 and is now inactive.
If you believe that you may have suffered any form of mis-sold SIPP or bad SIPP advice, you can get in touch with our team here at Pension Justice today and we’ll be able to offer you free advice on how to explore a claim.