Claims Door Opens for Clients of Three Failed Firms Responsible for Poor Pension Transfer Advice

Two firms recently declared in default are:

Holistic Pension Transfer Specialists, a Chesterfield-based financial adviser firm, went into liquidation in July 2023 and was dissolved in September 2023. So far, eleven claims have been lodged against the firm, one of which has been upheld. The FSCS declared the firm in default in July 2024. As far back as May 2021, restrictions were placed on Holistic, preventing it from disposing of company assets or client funds. In particular, “payments of unusual or significant amounts to The Firm’s controllers, shareholders, directors, officers, employees or any connected persons” could not be made without prior authority from the City watchdog, the Financial Conduct Authority (FCA). The FCA register also stated that “this firm cannot hold and cannot control client money”.

J Monroe Ltd, also known as Compendium Wealth (2016-2017) and Summit Wealth Management (2021-date), was an East Sussex-based firm and part of the Validpath network of Independent Financial Advisers (IFAs). J Monroe Ltd entered liquidation in 2021 and was dissolved in September 2023. The FSCS website does not indicate how many claims have been made against the firm, but one pension-related claim has been upheld.

The third pension advice firm to be declared in default in July is:

Donre Advisory Ltd, also known as Basi & Basi Financial Planning Ltd, was a London-based financial adviser firm. It had three subsidiary companies, PSG Sipp Ltd, Relay Administration Ltd (a Gibraltar-based pension scheme administrator) and MC Holdings (Malta) Ltd, and two appointed representatives, Express Newspapers and Onvestor Advisory Ltd (a Defined Benefit pension transfer advice company working with UK nationals living overseas). Donre Advisory faced FCA restrictions in May this year, following which the firm entered into liquidation. The FSCS is investigating the firm to see if “any claims meet the qualifying conditions for compensation, and this may take some time”.

SIPP Pension Mis-Selling Claims and Defined Benefit Pension Transfer Claims

Self-Invested Personal Pensions (SIPPs) are a flexible and tax-efficient way to invest for retirement. They offer investors a wide range of investment options, all managed as one.

SIPP mis-selling happens when financial advisers convince clients to invest in unsuitable funds. They may:

• Promise high rates of return, which don’t materialise
• Mislead people on the level of risk associated with an investment
• Fail to explain why a change of investment is deemed necessary
• Encourage investment in unregulated funds, such as overseas property, storage units or biofuels

Defined Benefit Pensions (DB) (also known as final salary or company pensions) are solid pension schemes usually offered by large organisations such as the NHS, local authorities and the armed forces. It is generally not considered good advice to transfer out of these schemes into a SIPP, as the SIPP would have to perform exceptionally well to cover the loss of ‘benefits’, such as a guaranteed final salary or death benefit, and also the fees incurred when transferring.

A good financial adviser should carry out a detailed fact-finding exercise, weigh up all the pros and cons of transferring a DB pension, keep clear, detailed records, and conduct regular reviews. Unfortunately, many people have been given poor financial advice and transferred their Defined Benefit pension, only to learn years later that it is worth less or unsuitable for their retirement needs.

One such scandal covered extensively in the press concerned thousands of employees of British Steel. The steelworkers were offered several options regarding their company pension, with many choosing to move their funds elsewhere into SIPPs. The subsequent mis-selling scandal became the focus of parliamentary debate and a government inquiry and led to the FCA reforming and reviewing the wider pensions industry.

When a financial adviser firm fails, the only option may be to take a claim to the FSCS. While it is possible to do this yourself, the process can be complex, so why not use TLW’s expertise to help navigate the whole process and get the best results for you?

For pension claims made after 1^st April 2019, the FSCS limit is £85,000, which may be considerably less than the loss you have suffered. We can investigate the possibility of making multiple claims linked to an investment or firm, aiming to recover what you are entitled to.

Peter McKenna, Partner at TLW Solicitors and FSCS claims specialist, says:

“When did you last review your pensions and the financial adviser companies you dealt with? Have you checked that they are still in business, that the investments are still suitable for your needs, performing as they should, and that you are receiving ongoing reviews? If you find that the value of your pension has gone down or that your adviser firm is no longer in business, has outstanding claims against it concerning pension mis-selling, or is listed on the FSCS failed firms’ website, you may be eligible for compensation.

“The thought of not having enough money for retirement after working so hard for years can leave people feeling worried and vulnerable. Our team deals with the FSCS daily, and we understand the claims and appeals routes. Get in touch for a no-obligation review and see if you can make a ‘no-win, no-fee’ claim.”