Lawyers for Sipp firm Carey Pensions have claimed the company did not break conduct of business rules when it set up a Sipp for a client, in a High Court dispute being heard this week.
In the case, lorry driver Russell Adams alleges Carey Pensions missold him a Sipp in February 2012, when he was paid an inducement of £4,000 into his savings account to encourage him to put money into rental scheme Store First.
He subsequently transferred £50,000 into a StoreFirst investment on 12 June 2012.
On the first day of the trial, 19 March, Judge Marc Dight said the case could shape the handling of missold Sipp claims.
Adams says Spain-based unregulated introducer Commercial Land and Property Brokers advised him to put money into the high-risk investment to get a “good return”.
Legal representatives for Adams allege the relationship breached conduct of business rules and he was not told how risky the investment was.
But legal representatives for Carey Pensions argue the conduct of business rules have been “misapplied in the case”.
Furthermore, they claim any guidance from the FCA about the responsibility of Sipp providers after 2012 should not be used in this case.
When questioned by lawyers representing Carey Pensions about his decision to invest in Store First, Adams said: “I read and signed the application form to transfer but it did not have risk warnings. The way Commercial Land and Property Brokers put it to me was it was a good thing to do. The gentleman said it… would do better than my existing pension.”
When Carey Pensions chief executive officer Christine Hallett was questioned by Adams’ legal team, it emerged that, in 2012, 30 per cent of the firm’s £1.9m revenue was due to business from CLP Brokers.
Hallett also acknowledged she knew Store First was a product of CLP Brokers and the firm made commission on it.