The Financial Services Compensation Scheme (FSCS) has started accepting claims against Consumer Wealth, an advice firm linked to the Greyfriars P6 investment (P6).
Consumer Wealth entered liquidation in January following 13 Financial Ombudsman Service (Fos) complaints.
Shortly after this the Financial Conduct Authority (FCA) put out a statement about the firm which said any client who was thinking of making a claim or had any concerns with the advice they received 'should contact the liquidator directly'.
Many Consumer Wealth customers seem to have been advised to invest in high risk, non-standard investments, many of which are now illiquid"
The lifeboat is now able to accept claims due to Consumer Wealth becoming insolvent, with the liquidation now in the process of converting to a creditors' voluntary liquidation.
"Many Consumer Wealth customers seem to have been advised to invest in high risk, non-standard investments, many of which are now illiquid," the FSCS said.
"We are also aware that Consumer Wealth advised some of its customers to switch existing personal pensions to Sipps. Consumer Wealth has also been identified as a distributor of the Greyfriars Asset Management Portfolio Six (P6) investment, which provided investment into non-standard assets," it added.
The FSCS said it is also currently investigating claims made against Greyfriars and ‘in particular its P6 offering, after the FCA expressed concerns'. Although it has started to accept claims against Greyfriars, the FSCS has not yet passed these claims to its assesment team.
In order to work out whether it will pay out claims against the collapsed DFM, the FSCS needs to work out if Greyfriars owes a civil liability to customers meaning they could sue the firm in court. If they are they would be classed as ‘protected claims'.
Greyfriars Asset Management was a wealth management business which had seen its permissions restricted by the FCA before becoming insolvent last year. The advisory arm of Greyfriars was sold to Insight Financial Associates for £440,000 in a deal that completed on October 16.