On 4 October 2019, the FCA published a statement providing information for Self-Invested Pension Plan (SIPP) operators following the administration of Berkeley Burke SIPP Administration Ltd (BBSAL).
On 18 September 2019, the directors of BBSAL placed the company into administration as they were unable to cover the costs of litigation arising out of consumer complaints relating to the business’s failure to carry out proper due diligence before allowing them to make certain investments. Consequently, the administrators discontinued an appeal made by BBSAL of the High Court’s judgment regarding the firm’s judicial review of a Financial Ombudsman Service (FOS) final decision against it. For further information, see previous blog here.
In its statement, the FCA reminds firms of its ‘Dear CEO’ letter published in October 2018, which explains that if the outcome of a case calls into question a SIPP operator’s ability to meet financial commitments as they fall due, they should contact the FCA immediately. The FCA also reminds firms of their obligations to treat complainants fairly and handle complaints according to the rules set out in the Dispute Resolution sourcebook. The FCA outlines the steps SIPPs should take upon receival of a FOS decision and if they decide to pursue a sale of part or all of its business or assets. The FCA concludes that in assessing any future regulatory applications, including applications for individuals to hold (or resume holding) FCA-approved roles, it will take account of how those individuals have acted in the context of the considerations outlined in the Dear CEO letter.