UK-based Sipp operator Pointon York has failed after the Financial Services Compensation Scheme (FSCS) declared it in default on 19 June 2020.
The UK lifeboat scheme started looking into the company in June 2019, because some of Pointon’s clients were advised by independent financial advisers to transfer their existing pension into the firm’s Sipp.
Following the transfers, customers had their funds placed on high-risk, non-standard investments, which have since become illiquid, meaning they cannot be sold or traded for the time being, the FSCS said.
For the FSCS to be able to pay out compensation, it needed to identify due diligence procedures operated by Pointon York.
On 5 June 2020, it said that protected claims exist against the Sipp operator, after it investigated its levels of due diligence.
High court
The FSCS said: “We’ve already assessed and paid several customer claims against authorised IFAs declared in default by FSCS, in relation to advice they received to transfer their pension into a Pointon York Sipp.
“There are currently civil claims cases against Sipp operators underway in the high court regarding their due diligence requirements.
“The outcome of these court cases will affect whether we can pay a claim against Sipp operators like Pointon York.”
