You might have missed it, but last week was a year since the Financial Ombudsman Service agreed to review a complaint upheld against Berkeley Burke Sipp Administration.
The original decision found that Berkeley Burke had failed to carry out adequate due diligence on a £29,394 unregulated collective investment scheme.
But after the initiation of judicial review proceedings by Berkeley Burke, the FOS agreed to look again at the decision. The move was both controversial and unprecedented.
Lawyers questioned at the time what powers the FOS had to reconsider the ruling, given that final decisions are legally binding on both parties once accepted by the consumer.
And over a year on, the industry is none the wiser as to what happened behind closed doors, or the outcome.
This is despite a need for clarity on the limit of Sipp providers’ responsibilities, as Sipp claims continue to flood the FOS and Financial Services Compensation Scheme.
“This decision has significant ramifications and it is not helpful for Sipp providers to have this hanging over them,” says Hill Dickinson partner Sarah Naylor. “I imagine the FOS is taking longer because it knows this will have a big impact.”
The FOS says it resolves the majority of its cases within a few months, but some cases take “considerably longer” where they are complex or involve appeals.
But Naylor says: “Where a decision has already been made and the FOS is just reviewing it, I would expect the final decision to be quicker than this.”
Association of Member-Directed Pension Schemes chairman Neil MacGillivray says there are just as many unanswered questions now as there were a year ago.
“We are 12 months on and this is still as big a mystery as ever,” he says. “There have been decisions on similar situations since, particularly from the Pensions Ombudsman, which are more sympathetic to providers. That just adds to the confusion.”
While the FOS argues that none of its decisions set a precedent as each complaint is considered on its individual merits, the Berkeley Burke case is seen as a line in the sand for many in the industry.
The FOS is no doubt hoping to sweep the whole episode quietly under the carpet, but the wait, if anything, makes the final decision appear even more momentous.
Either way, it is likely to sway some Sipp providers on how cautious they need to be on the type of investments they can accept.
And if the decision is overturned, the FOS will face some difficult questions from firms as to why it reconsidered this case without a judicial review, but not theirs.
What is clear is that the FOS needs to be much more transparent about what happened in this case – and give the Sipp industry clarity with a final decision.
Tessa Norman is deputy head of news at Money Marketing