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The collapse of PE-backed LEBC sparks FSCS claims

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LEBC, which had £5bn of assets and private equity investors, is likely to result in FSCS claims for advice on transferring from DB pensions.

The national advice firm LEBC Group, which has collapsed, is now subject to claims under the Financial Services Compensation Scheme (FSCS).

The Financial Services Compensation Scheme (FSCS) announced that LEBC had advised some customers to transfer out of their defined benefit pension schemes. These customers can now make a claim against the collapsed firm for their losses.

The national advice firm, which was supported by private equity investors, and had 46 financial planners and over £5bn of assets under advice last year. BP Marsh, the private equity firm that owns LEBC Holdings (the parent company of LEBC Group and Aspira), announced that the administration and asset transfer would not affect the valuation of the business.

LEBC announced on August 9th that it was entering administration, but its assets and staff were transferred to Aspira Corporate Solutions, its sister company.

The FCA has approved the asset transfer after ‘extensive consultation’ by Aspira.

In some cases, the FCA mandates owners to reserve capital to cover FSCS claims prior to the firms' administration. It is unclear if this requirement was met in this instance.

LEBC lost its pension transfer permissions in 2019 after conversations with the FCA. The Financial Ombudsman Service has published six upheld decisions against LEBC since September 2022, the latest of which relates to unsuitable pension transfer advice.

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