Thanks to Angie Brooks for bring to our attention a very disturbing matter relating to Carey Pensions.
“Careys” will be known to those working in the early days of auto-enrolment for providing auto-enrolment shells into which various entrepreneurial fund managers could launch fund solutions. Little survives of the various master trusts which were offered. These pensions did not appear on www.pensionplaypen.com nor on the Pension Regulator’s list of pensions with the MAF
But Carey Pensions are best known to IFAs as a SIPP provider who will offer contract based pension wrappers for entrepreneurial fund managers launching fund solutions.
Whether under trust or as a contract based pension, Carey administrate investments and keep member records to help the fund managers get the tax benefits from UK pension legislation.
What is not so well known about Carey is why they carry the name.
This is taken from the website of the Islamic Pension Trust, one of the many master trusts operated by Carey.
Carey Pensions is part of Carey Group which traces its origins back over 40 years and whose principle shareholders are ten partners of one of the largest international law firms in the Channel Islands, Carey Olsen.
The link between the Carey Group and Carey Pensions is clear from the pension link from the Carey Group website. However a search for Carey Group on the Carey Pensions website reveals little, the “about us” section makes no mention of the legal parentage.
Carey Group states on their website
Carey Group have historical links to, but are independent from, the leading offshore law ﬁrm Carey Olsen. Our principal shareholders are a number of past and present partners of Carey Olsen in Guernsey
I am not sure what legal status “historical links” implies, but from a reputational point of view, the link between Carey Pensions , Carey Group and Carey Olsen is both obvious and obscure, a legal paradox!
Which is odd, because the parentage is ssuch that any small business such as Carey Pensions should be proud of. Its Wikipedia entry points out that .
The Corporate Advisers Rankings Guide places Carey Olsen in the top five law firms by the number of London Stock Exchange (LSE) and AIM clients it advises. It is the only offshore law firm to be ranked alongside UK legal advisers in the top five. (Source: The Corporate Advisers Rankings Guide, January 2016 report
All of which would lead you to believe that Carey Pensions would leverage its historical links to attract high net worth customers confident they would be treated impeccably.
Why so shy?
The shyness of Carey Pensions about their links to Carey Group and to Carey Olsen may be explained by the local problems it is experiencing with the UK financial ombudsman.
This was the subject of a BBC investigation by the You and Yours team which produced a program last month which you can listen to here (17 minutes on).
Below is the excellent reporting of Citywire’s Jack Gilbert T/AS New Model Adviser (Jack runs Jo Cumbo close as investigative pensions journalist of the year)
The BBC You and Yours programme reported that the FOS is considering 77 claims against Carey Pensions and 24 provisional decisions have been made ruling in favour of the client and against the Sipp firm.
A FOS spokeswoman added ‘our investigations are ongoing and we haven’t issued any final decisions’.
These rulings concern the due diligence carried out by Carey Pensions on the unregulated introducer, which was selling investments in an unregulated investment scheme investing in Store First storage pods.
The BBC report also said the Financial Services Authority, predecessor to the Financial Conduct Authority, had previously issued a warning about one of the introducers involved in passing business to Carey Pensions.
Carey Pensions has been offering some of these investors settlement offers lower than the expected FOS compensation payouts.
One investor told You and Yours that Carey Pensions’ solicitors sent him a letter trying to convince him to settle.
Earlier in the year the Sipp firm reported a loss of f £153,800 in 2016 due to complaints and legal cases. The firm’s chief executive Christine Hallett confirmed these legal cases relate to the settlement cases.
Hallett said her firm has offered settlements to ‘resolve some members’ complaints on a confidential basis with no admission of liability’.
‘Any offers were made taking into account the individual’s circumstances and were presented in an open, honest, fair and reasonable manner,’ Hallett said.
‘The FOS has visibility of all ongoing complaints against Carey dealt with by its service, including any settlement offers made for complaints presently before FOS. We are aware that the FOS has been in dialogue with a number of members in respect of the offers we have made.’
Hallett said she ‘fundamentally disagrees with some of the findings of the FOS’ provisional decisions’.
New Model Adviser® asked Hallett why she was not appealing the decisions rather than paying settlements.
‘We are appealing but that is running in tandem and that could go on for a long time,’ she said. ‘We have made a decision to try and be fair and reasonable to the client. At the end of the day we are doing things with our legal advice and PI insurance advice.’
A spokeswoman from the FOS said: ‘If we’re made aware that a firm is seeking to bypass us to make offers, and especially if they are offering consumers less than we have or might recommend, we’ll refer them to the regulator.’
I suspect that Carey Pensions have good legal advisers – don’t you?
I suspect that they are very good at keeping bad news out of the public eye and that the letter mentioned by Jack and featured in the broadcast might well be sufficient grounds for FOS to refer Carey Pensions to the regulator.
It is not just the regulator that Carey Pensions should be mindful of. Hugh James, a top 100 solicitor themselves , have picked up on the commercial opportunity of advising others who have used the Carey SIPP and dodgy investments.
Carey Pensions UK has reportedly sent threatening letters to its investors in an attempt to prevent adverse Financial Ombudsman Service (FOS) decisions from being reported in the public domain.
It is has been reported by BBC Radio 4 that Carey Pensions UK is facing 24 preliminary decisions from FOS which suggest they are liable for losses incurred by investors as a result of their pension transfers.
It is understood that the decisions relate to complaints by pension investors who say they were persuaded to transfer their traditional pensions and to invest in highly speculative investments, such as self-storage units, by unregulated companies.
Following a report in October 2010, the Financial Conduct Authority (FCA) issued a warning in respect of Mr Terrence Wright, the man at the centre of a number of the unregulated companies involved. According to the BBC Radio 4 report, CareyPensions UK failed to heed this warning and continued to accept business from those companies that Mr Wright had an interest in.
Following their recent investigation, BBC Radio 4’S “YOU&YOURS” has reported that CareyPensions UK has been sending “long and threatening“ letters to their investors, claiming that the 24 FOS decisions mentioned above, are wrong and that they could face losing all of their money if they were to proceed with their complaints.
In the same report by “YOU&YOURS” it was stated that CareyPensions UK has been offering smaller but very quick cash settlements on the basis that the FOS complaints are withdrawn and no final decision is made public.
Further, it is believed, that these quick cash settlements come with a condition that the investor enters in to a non-disclosure agreement, effectively ‘gagging’ him or her.
Just what the partners of Carey Olsen make of all this is anybody’s guess, unsurprisingly they are keeping their heads down. Just what the legal liabilities between Carey Pensions, the Carey Group and Carey Olsen are is also unclear.
What is very clear is that Carey Pensions is in a first rate mess and risks damaging the unsullied reputations of the Carey name.
What is also clear is that Carey Pensions and by extension its parents are doing nothing to restore confidence and a lot to increase distrust in SIPPs and UK pensions in general.