The Financial Services Compensation Scheme has opened its doors to claims against two firms passporting into the UK to advise on pension transfers.
Wellington Court FS Ltd and Abana Unipessoal Lda were both passporting into the UK under the Insurance Distribution Directive.
From 19 December 2016, Wellington Court had permission from the FCA to carry out certain regulated activities including advising on investments and pension transfers. Prior to this date, it only had permission to carry out insurance mediation and insurance distribution activities.
FSCS said has been working with the FCA and the FOS to investigate the activities of Wellington Court.
The FOS has upheld a large number of complaints against Wellington Court in respect of its involvement with the transfer of customers’ pensions into a SIPPs administered by Guinness Mahon Trust Corporation Ltd (“GMTC”).
GMTC was declared in default by FSCS on 29 October 2020. However, where Wellington Court was involved in a customer’s transfer into the GMTC SIPP, FSCS has required customers to first exhaust their rights against Wellington Court via the FOS before FSCS is able to consider any claim against GMTC.
As Wellington Court has failed to satisfy the FOS awards the FSCS said it is now considering whether valid claims exist under its rules in connection with Wellington Court’s activities.
Abana was a Portuguese firm that, prior to 31 December 2020, passported into the UK on a services basis. Abana’s passport only covered insurance intermediation in the UK.
FSCS has determined that Abana undertook regulated activities for customers outside of Abana’s insurance intermediation permissions in the UK. These regulated activities included arranging pension transfers, notably into the Avalon & Westerby SIPP.
The compensation body said SCS protection may exist for customers where Abana arranged or advised a customer’s pension transfer in the UK, and the claim meets the qualifying conditions for paying compensation under our rules as set by the FCA.
However the FSCS noted that customer claims after May 2014 may not meet the qualifying conditions for FSCS to pay compensation. FSCS will write to those customers whose claims fall into this category.
Currently the FSCS is only open to claims against Abana from customers who transferred their pension into the Avalon SIPP and not the Westerby SIPP as Westerby is still a live entity.
