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Sipp complaints up 50% as FOS warns on Ucis

The Financial Ombudsman Service saw a 49 per cent increase in complaints relating to self-invested personal pensions in 2013/14.

In 2013/14 the FOS received 1,039 Sipp complaints, up from 697 complaints in 2012/13.

The FOS upheld 63 per cent of Sipp complaints in 2013/14, compared to 61 per cent the previous year, and says the majority of cases relate to advice to invest in unregulated collective investment schemes.

It says complaints about unregulated funds accounted for 75 per cent of Sipp cases last year.

The FOS says some consumers are being advised to move their retirement savings into Sipps that invest in unregulated investments such as overseas property, forestry and film schemes on the promise of tax breaks and good returns. Consumers are then later finding out they have no access to the invested funds.

The FOS says unsuitable Sipps are being sold to consumers who do not understand the risks or costs involved.

The information has been released ahead of publication of the FOS’s annual review later this week.

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Comments

There are 8 comments at the moment, we would love to hear your opinion too.

  1. Gordon Sinclair 19th May 2014 at 10:58 am

    Or another way of putting it is…”SIPP complaints rise to 0.06% of market”

    Doesnt quite have the same ring to it though!

  2. Most of these complaints will have arisen from the investor attending a seminar after being enticed to attend by a non-regulated firm. The SIPP provider will have been in cahoots but will have “recommended” in the prensentation that an IFA be used in order to pass the buck and liability. There will not have been rigorous due-diligence undertaken by the SIPP provider as that’s the responsibility of the investor and adviser! No wonder we are having disgruntled investors realising too late that they made a poor decision.

  3. I wonder what the regulator was doing when advisers like me reported unauthorised firms selling overseas property with in SIPPS backing 2007. Answer nothing!!!!

    Maybe if the regulator acted on some of the practices reported by hard-working IFA’s and we wouldn’t get in such a pickle when things like this blow-up.

    There is a well-known company that has been widely reported on by MM that is a really good example of where the regulator should have acted earlier but sat on its hands and did nothing!

    How many of these individuals gave unauthorised advice and even ran pension seminars without any authorisation

  4. @Gordon Sinclair and 75% of that 0.06% relate to UCIS.

    So perhaps the headline might be “FOS deals with more UCIS complaints”

  5. Gordon Sinclair 19th May 2014 at 12:04 pm

    @ Kevin Bailey

    I think its a wee bit unfair to point the finger at the SIPP provider.

    The whole point of a SIPP is Self Investment – a large number of providers dont give advice and just check that any investments dont breach HMRC regs. Suitability for the investor didnt really come into it.

    Sadly a lot of providers relied on the adviser / client to know what they were doing!

  6. Gordon

    Really you mean that holiday home in the Caribbean complies with HRMC rules.

    Think not!

  7. Gordon Sinclair 19th May 2014 at 2:25 pm

    @ Peter Herd

    Residential property never did so no and any SIPP provider worth their salt would have refused that!

    Most of the ones I saw related to forestry, tourist resorts and land banks, none of which seemed to contain taxable property so, on the face of it were OK by HMRC requirements.

    The fact that they turned out to be duff investments is a different matter!

  8. Julian Stevens 19th May 2014 at 8:20 pm

    The core issue appears to be inappropriate advice to invest in UCI Schemes. The fact that they happen to have been via SIPPs is secondary.

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