Self-invested personal pension (SIPP) provider Grosvenor Butterworth has left hundreds out of pocket. This came after an audit found them unsuitable to carry out pension activity.
An investigation by the Financial Conduct Authority (FCA) into Cardiff-based Grosvenor Butterworth’s Sipp schemes led to the company permanently closing its doors after being issued with a Section 166 notice. A section 166 is also known as a ‘skilled person review’.
Grosvenor Butterworth had initially suspended its advice on pension switches and transfers while a section 166 review was completed in June 2017.
The Section 166 was issued following claims made by investors that their valuable Sipp had been improperly managed. This raised concern surrounding financial mis-selling.
A section 166 meant the firm had to appoint a third-party auditor to review its internal practices. The ruling also meant the firm was forced to pause all regulated activity until the Section 166 was completed. As a result, massive funding restrictions were placed on the company.
It also stated the firm must end all ‘relationships with introducers, other than professional firms such as solicitors and accountants until the review has been completed. The company was unable to accept any new client money or custody assets and as a result, was forced to close in November 2017.
Speaking in at the time of the decision, Tony Cuming, Director at Grosvenor Butterworth, said the FCA asked the firm to give up the permissions.
The Financial Conduct Authority said recommendations to invest in discretionary fund manager (DFM) Beaufort Securities were ‘unsatisfactory’.
It has been alleged that these schemes were mis-sold. They should have only attracted investment from high net worth individuals who are able to take on significant financial risk.
Two thousand Beaufort clients are still awaiting refunds from the Financial Services Compensation Scheme.
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