Guinness Mahon Trust Corporation Limited ("GMTC") received complaints about historic high-risk non-standard investments (NSIs) and the lack of due diligence that GMTC had carried out before accepting these NSIs into its customers’ SIPPs.
Following professional advice about its liabilities arising from existing and potential claims, GMTC's directors were advised that GMTC was insolvent and should be placed into administration to provide protection for the clients and creditors. The administrators immediately sold the SIPP business to Hartley Pensions Limited (Hartley), another firm authorised and regulated by the FCA.
We are seeing consolidation in this industry with the smaller providers exiting because of potential liabilities and the larger managers with better risk management capabilities and capital base seeking the opportunity to gain a larger market share.
We having been advising on corporate M&A of financial services firms in this space including the due diligence process and indemnification provisions in SPAs relating to NSIs.