London wealth boutique brought down by AR pension transfers

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Boutique wealth manager Meyado Private Wealth Management London has entered liquidation following 13 upheld complaints at the Financial Ombudsman Service (FOS) relating to pension transfer advice given by a former appointed representative (AR).

The UK business entered liquidation on 29 October, according to documents filed at Companies House. It was part of global wealth management business Meyado Private Wealth Management, which is headquartered in Frankfurt and launched in the UK in 2014.

The firm owes £1.8m to the FOS in upheld complaints, according to a statement of affairs for the company filed at Companies House on 8 November. It also owes approximately £2.4m to creditors and an estimated £4.7m to member shareholders.

The FOS has assessed 15 complaints against the firm since March 2020, of which 13 have been upheld. 

Complaints against the firm are now likely to be assessed by lifeboat fund the Financial Services Compensation Scheme (FSCS).

On 9 March this year, the firm received a restriction from the FCA on its Part 4a permissions preventing it from taking on any new clients. 

It received an asset restriction effective from the same date. These restrictions prevent firms from selling business assets, such as client books, without the regulator’s approval. It was also prevented from paying out ‘significant’ amounts of money to shareholders or directors.

Meyado Private Wealth did not respond to requests for comment from Citywire New Model Adviser.

FOS Complaints 

The 13 recently upheld FOS complaints relate to advice given by specialist pensions firm Heather Dunne IFA (HDIFA), a former AR of Meyado Private Wealth Management London.

HDIFA gave up its defined benefit (DB) transfer permissions in 2017 after the regulator raised issues with how it worked with firms that outsourced pension transfer business to it. It went into liquidation in 2018.

Between 2011 and 2013, when HDIFA was an AR of Meyado, it advised the 13 complainants to transfer from their DB schemes to Sipps, which were then invested in unregulated investment schemes and illiquid assets that the regulator deemed unsuitable for retail investors.

These included overseas plots of farmland, other unregulated overseas property investments and carbon credits. Carbon credits are permits companies can purchase representing a right to emit a certain amount of carbon emissions.

The FOS found these investments were an unsuitable for almost all of the complainants.

In one instance, around three quarters of a complainant’s Sipp was invested in overseas property. Another client’s entire £80,000 Sipp was invested in carbon credits.

The FSCS, which is funded by a levy on regulated businesses, has been increasing the amount it pays out to clients of collapsed firms who received unsuitable advice on pension transfers and Sipps.