A firm of financial advisers have entered liquidation because it is unable to pay back clients to whom it mis-sold investments, leaving Financial Services Compensation Scheme (FSCS) levy payers to pick up the bill.
Turnberry Wealth Management – which entered liquidation on 27 March – has lost at least three cases at the Financial Ombudsman Service (FOS).
The FOS ruled that Turnberry advised clients to invest in high risk unregulated schemes that were unsuitable for them.
One case upheld against Turnberry involved a client being advised to invest in three unregulated collective investment schemes (UCIS), three years before she planned to retire without a personal pension.
Representatives for Turnberry claimed the then regulator, the Financial Services Authority, reviewed Turnberry’s promotion of specific UCIS in 2010, and found no issues.
The now Financial Conduct Authority (FCA) had not responded to questions about this claim at the time of writing – but in any case the FOS was not satisfied it was enough of a defence, and ruled Turnberry must pay the clients back what they had lost.
How much Turnberry owed the three clients where the FOS decisions have been published is not clear, as the amounts they invested have been redacted from the decisions.
But in one case, the adviser was reportedly ordered by the FOS to repay a client £15,000.
In another, the client took legal action against Turnberry for failure to pay the FOS-ordered redress. It is understood this action, and the other outstanding claims, led to the directors of Turnberry declaring the firm in liquidation.
The claims will now fall on the FSCS – and therefore levy payers – once the FSCS has officially declared Turnberry in default, which, at the time of writing, it had not.
The FSCS has already been forced to slap a £20m interim levy on life and pensions intermediaries as it deals with “bad” self-invested personal pension (SIPP) advice.
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