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Collapsed Sipp provider racks up £56m in compensation claims

May 2018
Money Marketing

Compensation claims against collapsed Sipp firm Lifetime Sipp Company have been valued at nearly £56m, with potentially more in the pipeline, according to its administrators.

In a report published on Companies House today, Kingston Smith & Partners gives a breakdown of claims against the provider that went into administration earlier this year.

Kingston Smith & Partners estimates the total number of claims to be near £56m. Around £22m-worth of claims are from clients who have no insurance, while £34.5m might have insurance.

The number of potential claims still to come is uncertain, Kingston Smith says.

Earlier this week Money Marketing reported fellow provider Hartley Pensions had bought the “tainted” assets of Lifetime Sipp.

Money Marketing has now discovered these “tainted” assets are spread across 2,800 Sipp clients and account for the nearly £56m claims logged against Lifetime.

Joint administrator Ian Robert says Kingston Smith & Partners wrote to 3,500 addresses to find out the scale of the claims and have settled on 2,800 actual Sipp clients chasing almost £56m in total.

He adds: “But we note there could be more claims and we have not been able to develop a comprehensive picture of who is and who is not exactly covered by insurance. So the £34.5m batch of claims probably do have insurance but we cannot say for sure.

“We have informed the FCA of what we [as administrators] have been doing and expect many of these claims will be settled by the Financial Services Compensation Scheme and Financial Ombudsman Service.”

Reacting to the adminsitrators’ report, Intelligent Money chief executive Julian Penniston-Hill says: “It is shocking such a small Sipp provider could have so many claims against it. The numbers of clients and sums of money involved is eyewatering.

“The fact the report notes there could be more claims that are not known but could materialise in the future is worrying.”

Lifetime had links to unregulated investment schemes such as Harlequin and the FCA is set to claim Sipp provider Berkeley Burke breached its conduct rules by accepting esoteric investments without due diligence in an upcoming court case that could potentially decide what responsibilities Sipp providers have to bear in future.

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