Financial complaints against Greyfriars Asset Management were sure to be incoming after the firm received new restrictions from the Financial Conduct Authority (FCA) in August 2018. It has been less than a month since the self-invested personal pension (SIPP) provider ceased taking on new client investments and already a substantial SIPP claim has been filed against the firm in the High Court.
After joining Greyfriars in 2006, Joseph Elliott reportedly invested almost half a million pounds into a SIPP portfolio with investments ranging from student property bonds to car park investments. By 2016, roughly 43% of the client’s retirement savings were mired in illiquid and alternative investments. The client’s SIPP claim is estimated at approximately £235,000 with additional considerations for interest, costs, and non-quantifiable damages.
Trouble at Greyfriars Asset Management
Retail investors are generally considered risk-averse by default. Marketing risky, alternative products to such customers via a SIPP portfolio should require a robust assessment to determine the client’s attitude to investment stability. This process protects both the consumer and the provider from potential SIPP claims. In Joseph Elliott’s case, he was characterised as a cautious investor by Greyfriars but was still encouraged to invest in risky and unregulated investments.
By 2016, as much as £22,575 of the client’s retirement savings had been put into an investment known as Lanner Car Park Yield Fund, and £12,575 in Merlin Secure Yielding Care Homes. Joseph Elliott’s SIPP Claim suggests that:
‘[Greyfriars] failed to properly warn the claimant in relation to these funds. In particular, that these are high-risk, small and highly leveraged instruments and it is unclear what real liquidity they present.’
While these sums are significant, they represent a fraction of the money that Joseph Elliott has lost through Greyfriars’ investments. Early last year, Greyfriars revalued their failing investment scheme ABC Corporate Bonds to a nominal £1 after the scheme went into administration. Joseph Elliott’s portfolio of investments with Greyfriars included an eye-watering £100,000 of ABC bonds.
This High Court SIPP claim represents Joseph Elliott’s best opportunity to seek redress, as the unregulated nature of these investments means they were not protected by the Financial Services Compensation Scheme (FSCS).
Greyfriars entered the spotlight last month after the firm reached an agreement with the FCA to cease accepting new money into the business. These new restrictions made it difficult for the firm to continue with its day to day business, forcing Greyfriars to recommend that existing clients seek future financial advice elsewhere.
SIPP Claims with Money and Me Claims
Money and Me Claims specialises in seeking compensation for clients that have been mis-sold financial products or services by independent financial advisors (IFAs) or SIPP providers. We have an excellent track record for successful SIPP claims with both the FSCS and the Financial Ombudsman Service (FOS), helping our clients receive fair compensation for financial misconduct.
If you would like to read more about the problems facing Greyfriars, read our blog post Alternative Investments: Greyfriars Receives New Restrictions from FCA. Or, contact us if you believe you have a potential SIPP claim.