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Ombudsman backs Sipp firm over missing £40k


The Pensions Ombudsman has thrown out a complaint made against Yorsipp after a member lost a £40,000 investment.

Alexander Toward said the Sipp firm failed to carry out proper due diligence on the 2011 investment, an unsecured loan to an unregulated firm called PFS.

The loan agreement stated interest was payable by PFS at 9 per cent a year paid quarterly.

Toward was a client of adviser Stewart Asset Management Limited, which began being wound up in 2013 and is now in liquidation.

Brian Stewart and Jacqueline Fowler were directors of SAML as well as PFS, but Toward says he did not know this when he made the investment.

In the application form he signed when making the PFS investment, Toward declared he had the financial ability to bear the risk of the investment and he was an experienced professional investor.

But Toward says he does not consider himself a professional but an “inexperienced, low risk” investor and relied on SAML as “experts”.

According to PFS’s liquidator report to January 2015 the firm had loaned £6.8m to three different parties “in order to fund certain litigious actions”.

The Ombudsman ruled Yorsipp undertook adequate checks on the investment under the requirements at the time. In addition, it was reasonable for Yorsipp to assume Toward had done his own due diligence after declaring he was a professional investor.

Ombudsman Anthony Arter says: “The evidence, therefore, falls short of establishing that injustice was caused to Mr Toward as a result of any failure on the part of Yorsipp to exercise due care and diligence in the conduct of business with him.”


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

  1. Gordon Sinclair 23rd July 2015 at 8:48 am

    This is a good result.

    Clearly the client was trying to play stupid on this one.

  2. Well done! to the Ombudsman

  3. “Toward declared he had the financial ability to bear the risk of the investment and he was an experienced professional investor.”
    Then when he lost his investment he decided that he was “an “inexperienced, low risk” investor and relied on SAML as “experts”.
    Tut tut Mr Toward, the Ombudsman caught you out!

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