Six pension firms shut over £21m rogue advice

Fast Pensions Ltd and five other related firms have been wound up in the public interest at the High Court, after an Insolvency Service investigation found at least £21m had been invested into pension schemes connected with the companies without adequate advice

Between 2012 and 2013, 520 people were encouraged to transfer their pension savings from existing providers into one of 15 schemes, with Fast Pensions acting as the sponsoring employer.

FP Scheme Trustees Ltd (FPST) was the trustee of all 15 pension schemes and a proportion of the funds were invested in the remaining four related finance companies.

The Insolvency Service was made aware of complaints about the management and operation of the companies and following an investigation, the High Court ordered that Fast Pensions and the five related companies be put into provisional liquidation in March 2018.

Investigations found that a total of at least £21m was invested into the 15 schemes and people were persuaded to transfer their savings through various methods. Some received cold calls questioning the performance of their pension funds or offering free pension reviews.

Others who were originally looking for credit were advised by the connected finance companies that they could get a loan if they transferred their pension savings to one of Fast Pensions’ schemes.

Advice provided was inadequate as the companies misrepresented the schemes on offer. Advisers also failed to disclose information around returns and the high risk and illiquid nature of the investments made by the schemes, as well as the benefits members would be entitled to.

Scheme members were also informed that the investments would consist of a wide ranging portfolio but investigators found that funds were misused. At least £4m was used to pay commissions and the remaining funds were largely used to make loans to companies and other entities which appear to be connected with Fast Pensions and FPST.

The six companies failed to preserve, maintain or produce adequate accounting records and failed to cooperate fully with the investigation. This made it impossible for investigators to determine the full extent of the companies’ activities, the nature and value of the investments made or the value of the members’ pension funds.

David Hope, chief investigator for the Insolvency Service said: ‘People work long and hard to put money away for their retirements but the six companies that have been shut down paid scant regard to their members. They used unsavoury tactics to attract members and failed to paint the full picture as to what would really happen with their savings.

‘By shutting the companies down, the courts have put a stop to their unscrupulous activities and we hope this sends a strong message that we will robustly investigate and take action where people’s funds and savings are at risk.’

The Official Receiver in the Public Interest Unit (North) is now the liquidator of all six companies and has made an application to The Pensions Regulator for the appointment of an independent trustee to take over the running of the pension schemes. It is anticipated that the application will take four to six weeks to complete. Further updates will be publicised in due course.

The six companies that are subject to compulsory liquidation are Fast Pensions Ltd; FP Scheme Trustees Ltd; Blu Debt Management Ltd; Blu Financial Services Ltd; Blu Personal Finance Ltd; and Umbrella Loans Ltd.

The 15 pension schemes involved are: Broughton Retirement Plan; DM1 Retirement Plan; Elphinstone Retirement Plan; EP1 Retirement Plan; Fleming Retirement Plan; FP1 Retirement Plan; FP2 Retirement Plan; FP3 Retirement Plan; Galileo Retirement Plan; Golden Arrow Retirement Plan;   Leafield Retirement Plan; Springdale Retirement Plan; Talisman Retirement Plan; Templar Retirement Plan; and VRSEB Retirement Plan.

Report by Pat Sweet

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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