Mis-Sold SIPPs – Kingsway Wealth Management – All You Need to Know

Mis-sold SIPPs are rapidly becoming the UK’s biggest mis-selling scandal. Thousands of people are out of pocket due to poorly sold pension products, and Kingsway Wealth Management is a key firm caught up in the debacle. Their selling of underperforming SIPPs invested in Cyprus One Limited has resulted in many clients potentially losing considerable sums of money.

If you’re one of Kingsway Wealth Management’s ex-clients and think you might be owed compensation, read on.

When did the problems start?

The Kingsway Wealth Management situation hit the headlines in 2019. However, the issues date back further than that. A search on the FOS website reveals that seven upheld decisions had been made against the company since 2013, regarding mis-sold investment products.

The majority of the current claims are regarding pension transfers (from defined contribution schemes to SIPPs) made from 2009 to 2012. Clients were encouraged to switch to SIPPs which were then invested in high-risk ventures such as Cyprus One Limited, which was a development of apartments located in Limassol, Cyprus.

These investments were made via Pension Transfers Ltd, who were Kingsway’s appointed representatives. Pension Transfers has since been dissolved.

If you believe that you were mis-sold a SIPPs product by Kingsway (via Pension Transfers), remember that help is at hand. Get in touch with our team today to find out more, by calling 0808 163 1659.

What complaints were made against Kingsway Wealth Management?

All the complaints made against the firm were regarding the mis-selling of investment products.

According to Kingsway’s administrators, 27 cases had been referred to the FOS, with three having already been ruled upon. For these three cases alone, the firm was ordered to pay out £327,000 in compensation.

However, Kingsway Wealth Management weren’t happy with the ruling. They contested the compensation claims, with a spokesperson commenting: “The company is a victim of claims management industry.” They also added that the company disputed the claims on an “ongoing basis, and intends to pursue other parties involved in these transfers in respect to losses attributed to their actions.”

How much will the firm have to pay out?

If all the claims are declared valid, then Kingsway will be made to pay a considerable sum in compensation. The company has already set aside £2.5million, in accordance with the most recent reporting rules.

However, this figure could rise. Kingsway’s administrators estimate that the actual figures for unsecured claims is likely to be around £3,483,148, if all the pension-switch claims are upheld.

What happened to Kingsway?

Unsurprisingly, the company went under as a result of the scandal. They officially entered administration in December 2019, according to information from Companies House.

The administrators, Quantuma LLP and Baldwin Holdings Ltd, have stated that they will support Kingsway in contesting the claims against them. As it stands at present, no details have been provided about the legal action they may face, or exactly how much they’ll be paying out to their ex-clients.

Can you make a claim against them?

If you believe you were mis-sold your SIPPs product by Kingsway Wealth Management (Pension Transfers), then you’re in a good position to seek compensation. The high-risk Cyprus One Limited investments have resulted in a loss of funds for many investors, and if you’re one of them, it’s worthwhile checking to see if you’re entitled to make a claim.

Here’s a checklist of questions you should ask yourself:

• Did they assess your attitude to risk? Financial advisors should always check your attitude to risk before recommending a SIPPs product. This ensures that you’re not offered a high-risk investment when you’d rather adopt a safer approach.
• Was the product explained to you? Did you know what your SIPPs were invested in? Was their current performance outlined to you, and were you made aware of any future risks? It’s a financial firm’s job to go through the details; if they failed to do so, this is a clear-cut case of mis-selling.
• Were you pressurised to make the switch? It may well be the case that your defined contribution scheme was the right option for you, and that a SIPPs product was a less beneficial choice. If you felt hassled into making the transfer, this is a classic sign of poor selling.

If Kingsway Wealth Management mis-sold you a SIPPs product, then get in touch with the Goodwin Barrett team today. We’ll explore the situation in more depth on your behalf, then let you know if you’ve got a good case against the firm or not. To find out more, call us on 0808 163 1659 or email enquiries@goodwinbarrett.co.uk.

 

References

https://www.ftadviser.com/regulation/2020/05/15/ifa-facing-millions-in-pension-claims-defaults-with-fscs/

https://www.moneymarketing.co.uk/news/ifa-with-2-7m-sipp-claims-falls-into-administration/

https://www.ftadviser.com/your-industry/2020/05/26/fscs-starts-paying-out-to-clients-of-failed-ifa/

https://www.moneymarketing.co.uk/news/administrators-of-collapsed-ifa-to-fight-pension-claims/