Embattled Sipp provider Berkeley Burke is appealing a ruling saying it failed to vet unregulated investments for one of its clients.
In the judicial review Judge Jacobs upheld a 2014 FOS decision against Berkeley Burke for failing to carry out adequate due diligence on a £29,000 unregulated collective investment scheme for a client, called Mr Charlton.
The judgment is important as it establishes with greater certainty that Sipp providers have a duty of care to vet unregulated investments for their clients.
Money Marketing reported on the case where legal representatives for the claimant Berkeley Burke said FOS’s decision was legally incorrect.
Now Berkley Burke Sipp Administration has applied to appeal the decision and expects to hear within a couple of weeks whether its submission has been granted.
It says the FOS decision and the subsequent appeal process is solely in relation to the Sipp administration business and has no bearing on the separately-run Berkeley Burke group of companies with their own clients.
In a statement given exclusively to Money Marketing Berkeley Burke Sipp Administration says: “The entire Sipp industry, platform providers included, are wondering who will be next in line for a claim brought by someone unhappy about the outcome of an investment that may have even been made 10, 20, 30 years ago or more even if simply transferred over in specie in person or via an IFA, for someone else to manage.
“Those with the largest funds under management and therefore the deepest pockets will be in the line of sight for professional claims hunters.”
The statement also criticises the FCA’s Dear CEO letter sent to Sipp operators to draw attention to High Court claims against Sipp providers Berkeley Burke and Carey Pensions.
It says: “What has been the impact of the Dear CEO letter sent out by the FCA within minutes of the Berkeley Burke Sipp Administration judicial review decision? It has had the opposite effect to that intended. The FCA, whose job is to offer protection and certainty in the shared space between operators and consumers, has opened up further uncertainty.”
Berkeley Burke Sipp Administration adds: “The effect of the FOS ruling will have more unmanageable pain. Unless overturned by appeal it will result in that reduction going far beyond that stated aim and most likely spill over into a reduction of other execution-only services, including those involved in the far larger market of non Sipp-wrapped stocks and shares trading.”