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FOS Sipp claims rise another 12%

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The Financial Ombudsman Service continues to see an increase Sipp complaint volumes.

The complaints adjudicator received another 408 Sipp-related enquiries between October and December 2016, its latest data shows, up 12 per cent from 364 over the same period in 2015.

140 made it to a final decision from an ombudsman, and 47 per cent were upheld.

From April to December, FOS has now taken on 1,042 new Sipp cases, almost as many as in the whole of the 2015/16 financial year when it took on 1,097.

Last month, the FSCS announced it had to impose a £36m supplementary levy on life and pensions advisers due to ongoing high numbers of Sipp related claims.

Investment advisers, however,  were refunded £50m on their total contributions.

The FOS received 700 enquires about personal pensions other than Sipps between October and December last year, down from 869 over the same period in 2015.

However, a slightly higher number made it through to an ombudsman; 92 compared with 90 in 2015.

Annuities saw just 105 new complaints over the quarter, only 17 per cent of which were upheld. This is down from 166 in the same quarter in 2015, when 22 per cent were upheld.

The FOS did not register any complaints data on SSASs. A product type must see more than 30 complaints in a quarter to show up in the published statistics.

Beating a bias?

A response from the FOS to a Freedom of Information Act request also released today shows that, between April 2014 and March 2016, FOS received 298 complaints over the fairness and impartiality of its decisions.

266 were sub-categorised as “bias to the financial business” against the consumer.

FOS said that “standards fell below what was required” in 21 of those cases, and compensation had been offered to consumers on five occasions.

The FOS said in its FOIA response: “We recognise that occasionally we do make mistakes. So, when it’s clear that we could have dealt with aspects of a complaint better, our managers use the same measures for deciding whether compensation should be paid as we do when resolving complaints with financial businesses.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Who pays the compensation when FOS cock up?
    Lets think about it …….oh we do !

  2. Are these complaints about SIPPs or about unsuitably high risk/flaky investments recommended via SIPPs? What about flaky investments recommended outside SIPPs? There must be quite a few of them as well.

  3. The “SIPP related” cases referred to in this article appear to be against IFAs in respect of advice to transfer to/invest via a SIPP.

    What would be of greater interest but the article doesn’t tell us, however, is the number of and rate of increase in the number of complaints against SIPP trustees themselves for their failure to discharge their contractual and fiduciary duties of care.

    For far too long, SIPP trustees have arrogantly considered themselves immune to complaint from their members and summarily dismiss them.

    We all know the standard defence of any SIPP trustee to any complaint being that they don’t give advice and are not responsible for the suitability of the investments the SIPP is invested into, that they only execute the investment instructions of the member as advised by the IFA. They seem to think that exculpates them from all and any liability to the SIPP member.

    A SIPP trustee’s obligations are as set out in the founding Trust Deed. That usually if not invariably states that the SIPP trustee is not responsible for any loss howsoever that arises, even from their own gross incompetence, with the exception of deliberate bad faith.

    FCA has issued various bits of guidance over the past few years – FG13/8 being the latest (I think) – as to the duties of care of the SIPP trustee to the member in relation to the nature of the investments the SIPP buys into.

    Invariably the SIPP trustee will argue that if the investment was acquired prior to the issue of any of these bits of guidance that it cannot and should not be applied retrospectively – and the Pension Ombudsman seems to be of a like mind.

    It is therefore no wonder that when a complaint is raised by a SIPP member against the trustees they argue that it is the Pension Ombudsman who has jurisdiction to deal with such complaint, not the FOS. SIPP trustees will usually cite a 2013 Memorandum of Understanding (MoU) between the Pension Ombudsman and the FOS to assert that the Pension Ombudsman has sole jurisdiction.

    Both arguments are fundamentally wrong:

    1 All of the FCA’s guidance makes clear that it does not impose new rules and standards but merely sets out what the rules already stated in and from April 2007 when the then FSA acquired regulatory control of SIPPs. There is therefore no question of retrospective application of new guidance, but merely the application of the rules that have always existed.

    2 The MoU between the Pension Ombudsman and the FOS does not create or detract from the powers of either the Pension Ombudsman or the FOS, but is merely a contractual arrangement between the two ombudsman services to address and seek to resolve overlaps of and conflicts between their respective statutory jurisdictions.

    I have a number of cases of SIPP members holding the SIPP trustees liable for their losses – failure to execute the investment instruction – which I raised in the FOS. As expected, the SIPP trustees solicitors argued that the complaints had to be dealt with by the Pension Ombudsman but FOS took the view that as I had elected to ask the FOS to deal with the complaints then the FOS would respect that and is now considering them.

    That, of course, is a far cry from actually winning the complaints which is quite another story.

    But the first stage of any complaint against a SIPP trustee is to get the complaint into and being dealt with by the FOS.

    It would therefore be of great interest if we could ascertain how many complaints FOS are considering against the SIPP trustees themselves and whether the incidence of such claims is on the increase.

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