Brooklands Trustees, a UK-regulated company with offices in a number of countries which marketed pension products to UK residents and expats under the Brooklands name, has gone into administration, and transferred oversight for its pensions to other entities.
According to an informational document sent to industry contacts, a copy of which was seen by International Investment, UK-based Heritage Pensions Ltd has been appointed “the new operator of the Brooklands SIPP” (self invested personal pension), and IVCM Heritage Trustees Ltd is “the new trustee of the Brooklands SIPP”. Duff & Phelps have been appointed the administrators.
As reported here in May, Brooklands has been caught up in a matter currently before the Financial Ombudsman Service and involving a client who lost money in an unauthorised Australian property fund that had been held in his Brooklands SIPP.
In a statement, Paul Evans, the Dubai-based group chief executive of IVCM, didn’t mention that case specifically but noted that Brooklands Trustees “currently have some provisional FOS adjudications against them regarding investment failures on clients who were advised by financial adviser firms”, and that, although Brooklands was contesting FOS adjudications, “it was decided that the sale should take place” in the meantime.
As a result, he added, Brooklands Trustees had sold the responsibility to manage and run the Brooklands SIPP in the UK, while IVCM – a new company which Brooklands rebranded as in 2015, while launching a new SIPP product in partnership with Heritage – would “continue to provide administration services to the SIPP”, at the same time remaining “the main point of contact for advisers and clients”.
Added Evans: “With added compliance and capital requirements being introduced within the SIPP framework, it was decided that selling the Brooklands SIPP to Heritage was the best way forward to deal with these points, and would also enable the merging of skills, processes and technology going forward in an ever-changing market.
“There will be little impact to the SIPP members, as the main terms and conditions and fees for the SIPP will not be changing”.
Meanwhile, IVCM and its companies “around the world” will, Evans said, continue to operate internationally, and the sale of the Brooklands SIPP would free it up to focus on developing its “international proposition”.
“All international parts [of the business] are totally unaffected, and it is only that [Brooklands Trustees] have sold the [UK] SIPP to Heritage…
“IVCM continues as-is internationally, and continues to do the general administration and [remain] the main contact for advisers and clients going forward.”
In May, the Times of London reported that the FOS had ruled in August of last year that a retired Boots manager from Reading – who had been deemed to have been advised to move his final salary company pension scheme to an unauthorised Australian property fund that was held in a SIPP – should be returned “to the position he would have been in but for the ‘unsuitable advice’” provided by an adviser.
The property fund in question had been administered by LM Investment Management, a Queensland, Australia-based, Australia Securities & Investments Commission-regulated fund manager which collapsed in March, 2013, causing massive losses for thousands of investors, particularly in the offshore world.
The case, which is still ongoing, was considered significant because it was seen as having potential implications for other UK-regulated pension fund providers that hold the pensions of individuals who can show that they took out those pensions on the basis of inadequate advice, the Times report noted.
In October Brooklands’ lawyers responded to the FOS ruling by rejecting its conclusion, “arguing that it had made sufficient checks”. (As the Times article noted, Brooklands had originally “spotted that FCP [Insurance Consultants, a Cyprus-based financial advisory business not regulated to offer advice on pensions in the UK], was not regulated to provide pensions and investment advice, and rejected Mr Rowe’s application” initially, but FCP then “formed a relationship with a UK-regulated company” in order to “see to it that the pension transfer went ahead.)
Following the Brooklands’ response, the matter was then moved into the FOS’s referral pipeline, according to the Times.
Evans has declined to comment on the matter, noting that the ruling was a “preliminary injunction” only and that it is company policy “not to discuss individual customer complaints while they are the subject of ongoing consideration or proceedings”.