Edinburgh-based SIPP operator Forthplus Pensions has gone into administration following a string of complaints to the Ombudsman about the firm’s due diligence.

Yesterday the directors appointed insolvency practitioners Leonard Curtis Business Solutions Group as joint administrators. 

Forthplus was unable to meet its FCA-mandated capital adequacy requirements and the board of the company recognised it was no longer able to operate.

The FCA said issues at the firm were compounded by a large number of complaints from clients to the Financial Ombudsman Service related to the firm’s due diligence prior to taking on pension savers. 

The Ombudsman had issued several provisional assessments which found that Forthplus had not undertaken adequate due diligence and therefore had not treated its customers “fairly and reasonably.”

Forthplus provided SIPPs to approximately 2,500 customers, mostly UK expatriates. The firm had assets under management at the date of the administration of about £500m.  

The administrators said the failure of the company was down to a range of factors. A key factor was the firm's inability to renew or extend its professional indemnity insurance (PII) following a number of client complaints to the Ombudsman. The firm ceased taking new business on 1 September while it tried to find PI insurance.

After consultation with the FCA, it was decided to protect consumers and to cancel all policies which had not received their first transfer and cease all in-flight transfers. The impact of this resulted in the firm having to write down significant sums of revenue and those losses placed the company in breach of its FCA-defined liquid capital requirement. 

The FCA said that as Forthplus did not agree with provisional client complaint assessments, the Ombudsman service was preparing to issue final decisions. Had the complaints been upheld and final decisions issued, further claims against Forthplus were expected. 

Following advice from Leonard Curtis the directors made the decision to place the firm into administration. The FSCS is now investigating whether there are any claims that meet the qualifying conditions for compensation.

The FCA says all clients of Forthplus should also be alert to the threat of fraud from cold call firms claiming to be from Forthplus, Leonard Curtis Business Solutions Group or any company claiming to be involved in the Forthplus administration.

Although Forthplus is in administration the FCA says that it can continue to operate existing pensions while the administrators look for a new operator.

The administrators will continue to make regular payments from clients’ SIPPs for anyone already in drawdown. The administrators will also continue to accept regular contributions from clients into their SIPPs. Pension assets are held by Forthplus Trustees Limited, which has not entered administration.

The administrators will be writing to clients within the next 7 days. The administrators can be contacted at: This email address is being protected from spambots. You need JavaScript enabled to view it. or Tel: 0161 532 4621.

Forthplus describes itself on its website as "a transparent and compliance focussed company, holding only vanilla standard investments and operating a genuinely clear and competitive pricing structure.”

Financial Planning Today has asked Forthplus for comment.

• Editor's Note: Our original story published earlier today has been updated with additional information from the administrators.