FSCS pays £ 1.2million on DB IFA transfer with 600 claims
The Financial Services Compensation Scheme (FSCS) paid £ 1.2million in compensation for pension claims against a collapsed Defined Benefit (DB) transfer consultancy firm.
Capital & Income Solutions went into liquidation at the end of 2019 after losing its DB transfer authorizations in June of last year. He now has over 600 FSCS claims against him, all of which relate to retirement advice.
The rescue fund said New model advisor it has so far paid a total of £ 1.2million in compensation, relating to just 20 personal pension transfer claims.
“To date, we have received just over 600 requests, all related to pensions. We have paid a total of £ 1.2million in compensation to date for around 20 personal pension transfer requests, ”a spokesperson said.
Capital & Income Solutions was a Leeds-based consulting firm that specialized in ‘pension release’ and withdrawal. It billed on a contingency basis, according to its website.
Earlier this year, New model advisor revealed that the company had ties to a lead generation company that provided it with more than 1,400 retirement transfer leads between January and July 2019.
New model advisor also revealed that the company was working with an introducer in Dundee who put it in pension transfer business for more than a decade until its eventual collapse.
New model advisor saw six adequacy reports provided to Capital & Income Solutions clients between 2009 and 2018, all of whom were billed a “one-time advisory fee” of between 4% and 5% for exiting a benefit plan defined, or to change supplier direct debit.
Some clients have been advised to switch their defined benefit pensions at a charge of 5% and then switch to a different direct debit provider at an additional charge of between 4% and 5%.
New model advisor contacted Capital & Income Solutions for comment. He had not responded at the time of publication.
Something must change
In recent weeks, advisers have expressed outrage after receiving huge increases in their FSCS bills.
Speaking to Twitter, an advisor said his FSCS bill was up 42.6% from last year, which, in addition to the tax paid earlier this year, drove the fee increase. year on year to over 90%.
Another said her FSCS bill had increased 78% despite not doing any “risky business leading to complaints”.
The FSCS bill has landed and it is up 42.6% with less than £ 100 of the increase not due to the increase in the FSCS part.
Add that to the extra levy we paid in January and this year my FSCS costs have increased by over 90%
Something must change
– Darren Cooke (@RedCircleFP) Aug 24, 2020
The regulator’s bill has arrived. Total costs up 50%. @TheFCA share up 6%. @FSCS share up 78%. We don’t do risky business that leads to complaints. It is scandalous and it must stop. How can a small business plan for this?
– Dan Woodruff (@danwoodruff) 25 Aug 2020