Intelligent Money Enters Administration Over Failure Of Financial Obligation

Sipp provider Intelligent Money has gone into administration due to concerns about its financial obligations after receiving complaints. The Financial Conduct Authority (FCA) has reported that the company’s directors have chosen Edward Boyle and Richard Heis from Interpath Advisory to be the joint administrators.

Quai Has Hired New Staff To Assist With Backlogs

On May 28, Intelligent Money sold its pension business to Quai Administration Services Limited. The FCA stated this move ensured the administration of General Investment Accounts, ISAs, and Sipps was transferred to Quai. This allows savers to keep contributing, withdrawing, and making investment decisions.

Tony Webb, Quai’s Chief Executive Officer, stated that this move guarantees stability and continuous service for Intelligent Money IFAs and clients. Also, it greatly improves their technical infrastructure. The statement reveals that Quai has kept the Shire Hall offices and the entire Intelligent Money team in Nottingham and is now hiring new staff to help with the backlog.

Webb further stated that this acquisition is a big step for the team, increasing their staff by 50% and making their team even stronger. Quai has been in this market for 13 years, with strong Sipp solutions and a focus on clients, making the two firms a good match. The deal brings Quai to about £2 billion in assets under management and over 40,000 Sipp accounts.

The Administration Address The Financial Risks From The Final Decision

The administration occurred after Intelligent Money got a final decision from the Financial Ombudsman Service about some investments allowed in its Sipps. Intelligent Money’s directors realized the financial risks, and after getting professional advice on insolvency, appointed joint administrators.

The Financial Services Compensation Scheme is currently accepting claims against Intelligent Money and is looking into whether any claims meet its requirements for compensation.

Intelligent Money Ltd (IM) manages a SIPP called the Intelligent Money SIPP. Until 2014, IM charged VAT on the services provided to SIPP members. However, after a review, IM argued it had wrongly charged VAT on these services. It claimed they were exempt as insurance provision under Schedule 9 Group 2, and sought a refund from HMRC. HMRC denied this claim, which led to the appeal.

IM stated that offering a SIPP was an EU and UK insurance transaction. The FTT agreed, stating that the IM SIPP met the Prudential test for insurance.

However, the FTT believed that it was evident from the case law of the CJEU that the VAT exemption for insurance was more limited than the general definition of insurance. It demanded the insurer bear risk in exchange for payment of the premiums.