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FSCS opens doors to claims against failed SIPP firm

The FSCS is working through nearly 1,000 potential claims against SIPP operator Guinness Mahon which collapsed in February.

The FSCS says it has opened the doors to claims but will await the outcome of a number of High Court cases against Guinness Mahon Trust Corporation Ltd (GMTC) before settling any claims.

Bristol-based SIPP and SSAS pensions firm Hartley Pensions bought the GMTC client book in February this year after GMTC collapsed.

The deal meant the transfer of 4,000 SIPPs previously administered by GMTC which suffered a string of problems and legal actions from unhappy clients. Hartley has bought a number of SIPP books in recent years as the sector has been beset with problems, including GPC, Berkeley Burke SIPP and Greyfriars AM.

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The FSCS says that it is aware that IFAs recommended many GMTC customers to transfer their existing pensions into a Guinness Mahon SIPP. 

After the transfers took place customers had their pension funds placed in “high-risk, non-standard investments.” Some of these investments have since become illiquid, halting their redemption.

In a statement the FSCS said to pay claims clients must prove that GMTC failed in its due diligence in carrying out checks on the non-standard investments before accepting them into its SIPP investment portfolio,

The FSCS is looking into whether the investments were appropriate for a SIPP and, if there were potential issues, whether Guinness Mahon raised these with customers.

There are currently civil claims cases against a number of SIPP operators in the High Court and the outcomes of these will affect whether the FSCS can pay a claim against SIPP operators like GMTC, the FSCS said.

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