Brooklands Trustees Limited, Stadia Trustees Limited and Montpelier Pension Administration Services Limited have all been declared in default by the FSCS, which means the body is satisfied the firms do not have sufficient funds to meet claims.
The FSCS says it has received approximately 150 claims against these firms. The claims relate to the way in which these firms established, operated and administered SIPPs through which consumers invested in non-standard investments such as storage pods, oil fields, diamonds and overseas property.
The FCA previously highlighted concerns in the SIPP market relating to due diligence failings.
FSCS chief executive Mark Neale said: “We are satisfied in these cases that certain claims are eligible for compensation, and expect to receive more claims of this nature during 2018/19.
“We have therefore adjusted our forecast funding requirement for investment providers to take account of these failures, but will continue to monitor claims volumes and will update our forecast ahead of the final levy announcement in April.”
Before the FSCS can pay compensation it must:
- receive at least one claim
- be satisfied that the firm is unable to (or likely to be unable) to pay claims against it.
The FSCS is required to carry this check out before it can pay out compensation to claimants.
Declaring a firm in default allows consumers who have lost money as a result of their dealings with the particular firm apply for compensation.