More providers to follow in Liberty SIPP’s footsteps of failure – solicitor

Hannah Godfrey reports...

More self-invested personal pension (SIPP) firms will fail as part of a domino effect started by the collapse of Liberty SIPP, where firms accepted non-standard investments within a pensions wrapper without carrying out “proper” due diligence, a solicitor claims.

Liberty SIPP entered administration on Tuesday (28 April) following a number of high-risk non-standard investment claims against it. The company was advised to enter administration to protect any creditors, including former customers.

The Liberty SIPP business and customer assets were sold to EBS Pensions – part of Embark Group – in October 2018. The Liberty SIPP legal entity was not part of the sale, however.

APJ Solicitors solicitor Glyn Taylor said his firm has been acting for 850 clients who had invested into high-risk non-standard investments via their SIPPs. Taylor said Liberty SIPP would not be the last SIPP administrator to fail.

APJ predicted that many SIPP investment firms would enter into administration, with Liberty SIPP being the latest firm within the last six months to do so, following Berkeley Burke and Guinness Mahon.

“As previously stated, we believe this to be part of a domino effect with more firms to follow, where firms accepted non-standard investments within the SIPP without undertaking proper due diligence on the investment as to whether the investment was appropriate for a SIPP,” Taylor added.

Those working in the SIPP industry have previously warned of potential “Armageddon” in the SIPP market if high-profile court cases involving SIPP providers and claimants who invested in non-standard assets went against the SIPP firms.

In the Financial Conduct Authority’s notice on Liberty SIPP published on Tuesday, the regulator said clients of Liberty SIPP should be “cautious” if they are approached by a claims management company.

The regulator added: “For the vast majority of former Liberty customers, there is no benefit in involving a third party in making a claim and you will be charged for their services. Any former customer who believes they have a complaint against the firm should contact the free to consumer services of the Financial Services Compensation Scheme in the first instance.”