Cambridge-based pension adviser Berkeley Jacobs Financial Services Limited (FRN 158901), which was fined £175,000 for pension rule breaches in 2004, has been declared in default by the Financial Services Compensation Scheme.

The default declaration by the FSCS opens the door to ex-clients with valid claims to seek compensation for losses from the FSCS of up to £85,000 per claim.

The move means the firm is unable to pay claims itself.

The FSCS said this week it had so far received 16 claims against Berkeley Jacobs Financial Services Limited. The firm was declared in default on 30 April when the first claim was upheld.

The claims are all related to pension advice but are not BSPS linked, the FSCS said.

The firm was fined £175,000 in 2004 by the Financial Services Authority (a precursor to the FCA) for rule breaches under the PIA (Personal Investment Authority), a previous regulator, for breaches of PIA rules between December 2000 and June 2004.

Berkeley Jacobs was involved in offering early pensions vesting to clients.

The PIA said at the time that the firm had breached multiple rules including: failure to issue financial promotions that were fair, clear and not misleading, failure to gather sufficient information about customers; failure to make suitable recommendations; failure to issue suitability reports that gave customers adequate and fair information about the recommended transactions and failure of compliance oversight.

The firm, which employed 33 regulated individuals at one point, transacted only one type of business, according to the PIA, the early vesting of pension benefits.

The PIA said the process by which pension business was achieved by the firm was “fundamentally flawed.”

In its disciplinary notice, the PIA said the firm had a “production line” approach to selling that was overly concerned with releasing cash for clients without balancing this against the inherent risks of early vesting.

Pensions were transferred to other contracts in order to generate additional cash for customers but many of the transfers were unnecessary, the PIA said.