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Sipp provider to pay out over non-standard investments

The Financial Ombudsman Service has ruled in favour of five individuals who lost nearly £100,000 after transferring their pensions into non-standard investments using Sipps.

In June, law firm Anthony Philip James & Co issued five cases against Sipp administrator Guinness Mahon Trust Corporation over allegations it worked with unregulated introducers to facilitate non-standard investments.

In an update APJ says five claimants who transferred between £13,000 and £26,000 into Sipps, have had positive rulings from the FOS after they fell victim to scam advice given in free pension reviews.

It argues the FOS rulings challenge the argument from Sipp providers that they only accept business on an execution only basis and are not liable for any losses suffered.

In the cases, APJ says unregulated introducer Avacade cold-called the victims and persuaded them to invest their pension pots into Ethical Forestry.

This was a scheme offering guaranteed returns of up to 15 percent from tree plantations in Costa Rica with the investments made through Guinness Mahon.

The FOS confirms it has ruled that APJ clients should receive compensation from Guinness Mahon to put them back in the position they would have been had they not transferred their pension from their original workplace schemes.

APJ solicitor Glyn Taylor says the FOS decisions are all similar as they establish Guinness Mahon should have known it would not be treating the individuals fairly.

He adds the rulings against Guinness Mahon pave the way for others in similar situations it is seeking to secure similar rulings for other clients who invested with other Sipp providers.

Other embattled Sipp providers such as Carey Pensions, Liberty Sipp and Berkeley Burke also face legal challenges for their roles in cases involving unregulated investments.

The Berkeley Burke judicial review hearing between it and FOS is set for October while the ruling in the Carey Pensions case is also expected next month.

The FCA was allowed to give evidence in both cases and in August revealed it is pursuing two unregulated introducers involved in the transfer of at least £86m in pension assets from over 2,000 customers.

Guinness Mahon was approached for comment but was not available in time for publication.

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