The Financial Services Compensation Scheme has declared Scottish-based Financial Planning firm EQ Financial Planning Limited in default.

The FSCS decision opens the doors to clients of the firm to submit claims for compensation.

EQ Financial Planning Limited (FRN 575160) has a single valid claim in progress which is related to pension advice, the FSCS told Financial Planning Today.

The claim is not related to the British Steel Pension Scheme.

The Financial Planning firm has not been authorised to provide regulated activities since February 2016.

According to Companies House, EQ entered voluntary liquidation in November 2016.

Angus-based EQ was co-founded by former Quilter and Chase de Vere adviser Archibald Pottinger along with six Chartered Accountants from Scottish accountancy firm EQ Accountants LLP in 2012. He was the sole adviser at the firm.

The firm mainly provided complementary Financial Planning services to clients of EQ Accountants LLP in Dundee and Forfar.

At the time of liquidation, EQ had assets of £5,210 which covered all debts held by the firm and a small distribution to shareholders.

EQ has no connection to London-based wealth manager and Financial Planner EQ Investors or other firms using EQ in their name.

EQ is the fourth firm to enter default with the FSCS this month, with several having claims against them for pension advice.

Advice firm Bartholomew Financial Limited (FRN 596038) was declared in default last week by the FSCS after facing 12 claims from ex-clients, with all 12 claims relating to pension transfer advice. 

Other recent advice firm failures with pension advice claims include Mercia Financial Planning Limited of Warwickshire (FRN 718251), FSP Limited (FRN 607441) of North London, Bolton-based Smith, Law & Shepherds IFA Ltd and Birmingham-based County Capital Wealth Management Ltd.

The FSCS is forecasting a 20% cut to its levy requirement for 2023/24 thanks to high levels of surplus built up in the current financial year.

The move could see the levy cut from £625m in the current financial year to £478m in 2023/24 and is likely to mean a lower levy for many of the firms which fund the FSCS.

This year the FSCS has been able to recoup more than £6m from failed firms and costs have been lower than expected, it said.

While compensation in 2023/24 is expected to rise overall, the indicative levy is lower than in the current financial year due to surpluses being carried over, the FSCS said. One reason for this is that complex cases are taking longer to resolve so compensation payments are taking longer to pay out than expected.