Administrators of the collapsed Sipp firm have estimated they could face at least £8.5m in liabilities related to non-standard investments.
Guinness Mahon were placed into administration in February 2020 after a flurry of pension transfer complaints. Now, administrators, Smith & Williamson, say that if there are adverse adjudications by the Financial Ombudsman Service in relation to these complaints their contingent liabilities could top £8.5m.
The update provided by the administrators also states that the Guinness Mahon directors were aware of these liabilities.
The FSCS website provided an update on their website also:
We're aware that independent financial advisers recommended many GMTC customers to transfer their existing pensions into a Guinness Mahon SIPP. And that after the transfer, customers had their pension funds placed in high-risk, non-standard investments.
Some of these have since become illiquid, which means they can’t currently be sold or traded.
Who were Guinness Mahon?
Guiness Mahon was a SIPP provider who first made the headlines in 2018 after the Financial Ombudsman Service (FOS) ruled in favour of five of their clients - who in total lost almost £100,000 - after investing their pensions in unregulated assets.
In these five cases, a FOS adjudicator sided with claimants who invested in the unregulated Ethical Forestry, a scheme offering returns of up to 15 percent from tree plantations in Costa Rica.
At the time, the FOS said the SIPP provider Guinness Mahon had failed in its due diligence of the introducer involved in the sale and should have refused to take the business.
The problems did not stop there for Guinness Mahon, however. Last year the firm was ordered to pay compensation to two clients following more unregulated SIPP transfer advice – this time from unregulated introducer Avacade Limited.
They too were involved in high-risk unregulated schemes such as Ethical Forestry and Global Plantations. Smooth Commercial Law Director Scott Birchall was handling the two cases.
Can I still make a complaint against Guinness Mahon?
Yes, complaints can be made via the Financial Services Compensation Scheme (FSCS). The Financial Services Compensation Scheme (FSCS) is a statutory deposit insurance and investor compensation scheme. It can compensate clients if a financial firm is unable to. It has often been described as a “lifeboat” fund.
Smooth Commercial Law work alongside the FSCS to get clients the compensation they deserve. The FSCS have protected more than 4.5m people and paid out £26bn in compensation.
How can Smooth Commercial Law help?
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, including the transfer of pensions.
We are currently acting for over 30 clients who are looking to bring claims directly against Guinness Mahon for failing to adhere to their responsibilities and obligations to our clients. If you have invested via a SIPP with Guinness Mahon please contact us today for a free no obligation chat and we can see if we can help.
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.