Self-invested personal pension (SIPP) provider ForthPlus Pensions has entered administration after failing to secure continued professional indemnity insurance (PII).
Forthplus had around 2,500 customers which were predominantly in the UK. The company were managing assets around £500m before they went bust on Monday 19th October.
Leonard Curtis Business Solutions Group the administrator overseeing the administration said: “"The demise of the company follows a range of factors, most notably the impact of the inability to renew or extend PII."
On 1 September, Leonard Curtis said, the SIPP firm announced it would put a hold on accepting new applications while it decided regarding PII. However, after consultation with the FCA, it was also deemed appropriate to protect consumers and to cancel all policies that had not received their first transfer and cease all in-flight transfers.
"The impact of this resulted in the firm having to write down significant sums of revenue, and those losses placed the company in breach of its FCA defined liquid capital requirement," said the liquidators.”
The FCA’s website states “Forthplus was unable to meet its regulatory capital adequacy requirements and the Board recognised it was no longer able to operate. This was compounded by a large number of complaints at the Financial Ombudsman Service related to their due diligence before taking on pension savers.”
Liquidators for the beleaguered SIPP provider said the outcome of the ruling could result in a series of claims against ForthPlus.
"Having explored all options available, the board ultimately concluded that there was nothing that could be done in the short term given the current circumstances to rectify the position and the company was no longer able to meet the threshold conditions to remain as compliant business.
"Accordingly, the board resolved that the company was not able to continue operating and therefore steps should be taken to protect the interests of customers, creditors and stakeholders and the company should be placed into administration."
The administrators said it was currently assessing the options available regarding the transfer of customers to an alternative FCA-regulated SIPP provider.