The Financial Services Compensation Scheme has launched probes into two failed investment firms this week - IFA firm Verus Financial Services Ltd and investment provider Aspiro Research and Development LLP.
The FCA halted business at London-based IFA Verus (FRN 765214) last December after a number of “deliberate” breaches of existing rules.
Verus Financial Services Ltd was authorised by the Financial Conduct Authority from March 2017. It was an independent financial adviser firm providing investment, pension, mortgage, equity release and insurance advice, the FCA said.
Verus was registered at an address in Great Portland Street, London W1. Last year the FCA imposed stringent asset restriction after the firm, “repeatedly and deliberately breached and asset restriction,” according to the FCA.
The watchdog said the action followed concerns that the firm repeatedly breached existing restrictions which prevented it from, "selling, transferring or diminishing its assets without our approval.”
The firm is also alleged to have failed to comply with a Financial Ombudsman Service decision on SIPP advice which resulted in a client allegedly losing £415,000. Verus rejected some aspects of the claim, saying a third party had been involved. The SIPP was invested in, “unsuitable high risk non-standard investments”, according to FOS adjudication.
The FSCS has asked people with potential compensation claims against Verus to get in touch via its website. The FSCS said that it was accepting claims against Verus but they will not be immediately passed to its claims processing teams for assessment. It is investigating the firm to determine whether claims meet the qualifying conditions for compensation and added, “this may take some time. We are working closely with the FCA.”
Aspiro Research and Development LLP is also under investigation. It was described by the FSCS as an investment with a complex structure involving several related entities.
The investment was typically sold to customers as part of advice to transfer benefits from occupational or personal pension schemes into qualifying recognised overseas pension schemes (QROPS). Some customers subsequently incurred tax charges associated with these arrangements, the FSCS said.
The FSCS said it had received claims concerning financial advice that led customers to invest in Aspiro and has issued decisions on some of these claims.
At the time, the information available to FSCS indicated that the Aspiro investment still had some value. This affected the amount of compensation the FSCS was able to pay. The FSCS is now carrying out further investigations into the investment, including whether additional compensation may be payable.
• Editor's Note: Financial Planning Today has asked for further information about the cases. Any updates will be added later.