The Financial Services Compensation Scheme has declared Sipp operator Rowanmoor Personal Pensions in default after receiving 1,464 claims against the firm.
FT Adviser understands that of the 1,464 claims, one has been upheld which has triggered the default.
Rowanmoor collapsed in August 2022 under the weight of hundreds of complaints related to failed offshore investments in its Sipps.
These were then re-routed from the Financial Ombudsman Service to the FSCS, which has been investigating them since.
Some of those claims date back to 2019, and investors have previously told FT Adviser of the financial hardship they are facing due to the delays in settling their claims, with one investor who is nearing retirement saying he will have to sell his house to make ends meet.
In July, FT Adviser reported that claims against Rowanmoor could be delayed by half a year as the FSCS worked to finish its investigation.
Questions had been raised by many investors about the investigation, after the Fos had found in their favour in a sample case in 2022, which ultimately brought Rowanmoor to its knees.
But the FSCS assured claimants in May that it was not duplicating work already done by the ombudsman.
It said the way it determines claims and the way the Fos determines its complaints are different, particularly when it comes to the question of whether the firm owes a civil liability to its claimant, which is a core test for claims with the FSCS, but does not determine a Fos decision.
A spokesperson told FT Adviser at the time: "The Fos determines complaints based on whether it considers that regulated firms acted in a way which was fair and reasonable in the circumstances.
"The Fos does not decide complaints based on whether a firm owes a civil liability to a complainant, which is the test that FSCS must apply under our rules.
"This means that the eligibility criteria under our rules will not necessarily be met just because the Fos may uphold a complaint in similar circumstances."
Rowanmoor’s past troubles
Rowanmoor has been faced with a number of complaints for several years, with the Fos finding against Rowanmoor in a sample case back in January 2022, involving due diligence errors.
It found the Sipp operator had failed to verify the integrity of an introducer firm it worked with on hundreds of high-risk self-invested personal pension investments.
The Fos said Rowanmoor should have spotted warning signs sooner that the regulated advice firm, CIB Life and Pensions Limited, was not giving its clients the full advice it had purported to.
Failure to do this resulted in client Mr T losing his occupational pension savings on an unregulated offshore property deal.
The Fos told Rowanmoor to drum up the cash needed to compensate the client fully, as well as take ownership of the investment so the Sipp can be closed and further fees prevented.
