Suspended Investments & FSCS
Calvert76
Member
Hi, wondering if the collective can help?
Have a SIPP client we took over whose previous adviser recommended 2 investments which are now illiquid and he has been compensated by FSCS. Issue is that client would now like to transfer remaining assets (all vanilla) to a new lower cost SIPP, but current administrator is blocking as they don’t want to be left with covering ongoing costs of suspended investments. Surely client should no longer be responsible for meeting ongoing costs of suspended investments (via high SIPP charges) if the case has been settled by FSCS? Any ideas/suggestions?
Have a SIPP client we took over whose previous adviser recommended 2 investments which are now illiquid and he has been compensated by FSCS. Issue is that client would now like to transfer remaining assets (all vanilla) to a new lower cost SIPP, but current administrator is blocking as they don’t want to be left with covering ongoing costs of suspended investments. Surely client should no longer be responsible for meeting ongoing costs of suspended investments (via high SIPP charges) if the case has been settled by FSCS? Any ideas/suggestions?
Comments
Can the current provider just wipe the asset off their holdings if it's zero valued? i.e. make it disappear so all that's left is what you want to transfer?
I think that will depend on who the FSCS claim was settled against. If it was the adviser then I would expect the SIPP provider is within its rights to keep charging the client for the SIPP for the administration of those assets.
What was the valuation of the assets in the FSCS compensation calculation? If the value was nominal, can the SIPP sell them to the member at arm's length and him take personal ownership?
Agree that it does depend on the claim. Although having worked for a platform I do remember cases where the adviser took ownership of the asset, but it sounds like the investment is illiquid / winding down rather than of nil value.
Is there any way the illiquid investment can be moved / "bought" by / transferred to a GIA (i.e. a 'free' wrapper), so that it can be forgotten about and allow a transfer of the other sipp assets? This might be one to explore with the platform itself, and not practical if there are no non-pension assets, or the illiquid investment still has a meaningful value.