Wellington Court Ordered to Pay Compensation

Dolphin Capital hit the news in 2019 when concerns were raised that its guaranteed 10% returns were not achievable and maturity payments could be delayed by up to 12 months. By 2020, the shares were worth only 10% of their original value. Our blog highlighted the fact that Dolphin Capital was facing bankruptcy, the firm has since failed.

In the FOS complaint, the client, Mr S said that he had been cold-called in 2015 by Wellington Court, an introducer firm who carried out preliminary fact-finding work and advised him on which funds to transfer his pension money into. Mr S signed a form to say that he would pay Wellington Court 1% of the fund value for financial advice and this would be paid directly to them by Guinness Mahon, a regulated financial services firm who completed the pension transfer and invested Mr S’s money into Dolphin Capital.

During Wellington Court’s fact-finding process, Mr S had been assessed as a low to medium risk investor, however, the funds ultimately recommended were non-mainstream, unregulated and high risk. In Mr S’s case, the Ombudsman concluded that the SIPP transfer was unsuitable, given his circumstances, and he would be entitled to compensation.

“It wasn’t us”

Wellington Court appealed the original FOS decision, claiming that, as their representative was not regulated, he would not have given any financial advice. They said that Mr S was never a client of theirs and any paperwork he produced must have been fraudulent. Further, they tried to pass off the 1% payment from Guinness Mahon to Wellington Court as money for administrative consultancy work and not an adviser fee. And they also claimed to be the victims of fraudulent activity by Guinness Mahon, who they alleged were running a ‘scam’ which the Financial Conduct Authority should have alerted Wellington Court about.

FOS disagreed with Wellington Court reporting that they were dealing with a significant number of other cases with very similar features. These cases all clearly showed adviser fees on investors’ statements and it could be demonstrated that over £87,000 in fees had been paid to Wellington Court by Guinness Mahon over a 6-month period in 2015. Wellington Court had never queried these fees as unexpected or unwelcome, nor reported any potentially fraudulent activity to the police.

The Ombudsman ruled that Mr S should be put in the financial position he would have been in had he received suitable financial advice. If the fair value calculated is higher than Mr S’s current pension value, Wellington Court must pay into Mr S’s pension and also pay interest at 8% on that amount.

Sarah Spruce, Head of Professional Negligence at TLW Solicitors said of the FOS decision:

“Currently, we are helping a number of clients who have had dealings with Wellington Court. We have now received a number of favourable decisions from FOS and have more cases awaiting decisions.

I would urge anyone who invested with Wellington Court, Guinness Mahon or Dolphin Capital to get in touch – even if their case was previously rejected or they think it is out of time for making a claim.”