The Financial Services Compensation Scheme have received over 1,400 claims against recently collapsed Sipp provider Berkeley Burke. Their investigation is currently underway after finding that at least one of the claims is eligible, and it could see the Scheme pay out up to £158 million in compensation.
The FSCS have said it was aware that several independent financial advisers recommended many clients to transfer their existing pensions into a Berkeley Burke Sipp and has already had to pay out £54 million, on 1,400 claims against IFAs.
After the transfer, customers had their pension funds places in high-risk, non-standard investments of which some have since become illiquid, and can no longer be sold or traded. Therefore, the FSCS’s investigations into the defunct provider are focusing on due diligence failings before allowing customers to make unregulated investments with their pensions through the firm.