The Lifetime SIPP Company Ltd has been declared in default by the Financial Services Compensation Scheme (FSCS) after going into administration in April 2018.
The FSCS revealed it had concluded its investigations into the firm's practices, explaining it had focused on the "levels of due diligence Lifetime carried out prior to allowing customers to make specific investments under their pensions".
The lifeboat fund said it had now determined that protected claims existed against the firm. Lifetime SIPP entered administration back in April 2018 and, by July 2018, the FSCS had received 220 claims in the relation to the company.
The FSCS said claims already submitted against Lifetime SIPP will now be passed to its processing teams for assessment, with some 400 customers potentially affected.
Professional Adviser understands there were a number of complaints to the Financial Ombudsman Service, raised by consumers who had invested in 'toxic' SIPPs. These were upheld, resulting in heavy fines against the business, meaning the company was insolvent because it was impossible to insure against the claims.
Earlier this week, PA reported GPC SIPP had entered insolvency after fighting a raft of claims and complaints made against it in relation to investments in the Harlequin property scheme.
Administrators Smith & Williamson were appointed as joint administrators of the SIPP provider, which was previously known as Guardian Pension Consultants Ltd.
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More than 4,500 retail investors affected
Paid out £54m in related compensation
Changes to take place by next year