In Embark’s 2021 financial results, the platform shared its calculated range of redress for claims against Rowanmoor’s Sipp business. The range spanned from £217mn to £362mn.
Embark said it had stuck to the upper end of the redress range it estimated due to the fact time bars on claims would likely be waived, and that the compensation per client would likely exceed the Financial Ombudsman Service cap of £150,000 to £160,000.
Elsewhere in its results, however, Embark said it “no longer has any obligation” to RPPL which saw the £343mn re-absorbed back into Embark and just £1.26mn put aside for customer redress provisions.
The fall of RPPL
The issues leading to RPPL’s insolvency pre-dated Rowanmoor’s acquisition by Embark in 2016.
Back in January, Rowanmoor was found to have failed in its due diligence by the Financial Ombudsman Service.
The upheld Fos complaint found Rowanmoor had failed to verify the integrity of introducer firm CIB Life and Pensions Limited, which it worked with on hundreds of high-risk Sipp investments.
Failure to do its due diligence led to clients taking the introducer firm’s advice and losing their occupational pension savings on an unregulated Cape Verde-based property deal called The Resort Group.
When RRPL was declared insolvent, the Fos was handling some 1,000 claims against Rowanmoor.
The Financial Services Compensation Scheme is investigating if there are any claims that meet the qualifying conditions for compensation.
If claims fall on the FSCS, then clients who lost money can receive compensation up to a limit of £85,000. With the Fos, the compensation cap is £150,000 - £160,000.
FTAdviser is aware of clients of Rowanmor who lost as much as £400,000 as a result of due diligence failures at the pension operator. These failures led some to lose multiple pensions.
Embark declined to comment. Evelyn Partners was approached for comment.
ruby.hinchliffe@ft.com
