Consolidator, Options UK, has bought the failed SIPP provider for an undisclosed sum.
Berkeley Burke has spent much of the last five years fighting court decisions and claims from its angry former pension clients. The former self-invested personal pensions (SIPP) provider’s liabilities eventually resulted in its collapse earlier this year.
Now, pensions consolidator, Options UK, has bought the business for an undisclosed fee. The deal involves both its financial services and employee benefits branches. Options UK is the pension solutions arm of financial services provider, STM Group.
Directors have said that the business will be integrated into Options UK, with the aim of strengthening the firm’s position in providing SIPPs. Christine Hallett, Options UK managing director, said of the news:
This is great news because it will significantly strengthen our position in the UK market, and it’s an important development in our growth strategy based on offering advisers and their clients a genuine solutions-driven service to help them plan for their tomorrow.
STM Group said that it will be “business as usual” for Berkeley Burke’s clients and employees. Grahame Berkeley will act as a consultant to the business for the foreseeable future.
The STM Group have a history of buying SIPP businesses after completing an acquisition of troubled Carey Pensions in October 2018 while also buying London & Colonial in 2016.
What happened to Berkeley Burke?
Earlier this year the Financial Services Compensation Scheme (FSCS) received 1,474 claims against Berkeley Burke. The cause of these claims was the SIPP provider accepting high-risk, unregulated investments, many of which have caused large investor losses, between 2010 and 2012.
Berkeley Burke was put into default on April 1st 2020, and claims are now focussed around due diligence failings before allowing clients to make unregulated payments with their pensions.
The embattled SIPP firm has faced claims from a group of over 177 investors, of which over 30 were Smooth Commercial clients, over losses they incurred from these high-risk investments. The investments ranged from forestry in Australia to holiday apartments in Grenada, a court document has revealed.
In a separate case, Berkeley Burke was fighting a 2014 FOS decision which stated that it had to compensate a client after it failed to perform necessary due diligence on the client’s investment.
The investment revolved around an unregulated investment scheme, Sustainable Agro Energy, which sold plots of land in Cambodia where trees would be planted to create bio-fuel.
The Berkeley Burke administrators dropped their appeal case earlier this year after their funds would have been short of the "total potential legal costs" faced if the SIPP provider lost its appeal.
There are now estimates that the FSCS could pay out more than a hundred million pounds in compensation.
How can Smooth Commercial Law help?
Smooth Commercial Law have been a driving force throughout the Berkeley Burke saga. We are one of the law firms representing clients in the ground-breaking Group Litigation Order – with 33 clients in total.
At Smooth Commercial Law, our team of experts have extensive experience in dealing with a whole manner of claims that arise from negligent and/or unsuitable financial advice. We are seeing more and more mis-sold SIPP claims, and have managed to secure compensation for many of our clients.
Should you have a claim, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.