Sipp firm Carey Pensions has claimed it never supplied marketing material to unregulated introducers to promote its products, as its High Court case rumbles on this week.
Carey Pensions chief executive Christine Hallett gave evidence in the third day of the case yesterday, in which lorry driver Russell Adams alleges Carey Pensions missold him a Sipp.
Prosecution lawyers asked Hallett for details about how Adams came to use a Carey Pensions Sipp and the firm’s wider relationship with unregulated introducers.
Adams says unregulated introducer Commercial Land and Property Brokers, based in Spain, advised him to put money into the high-risk Store First investment as it would get him a “good return”.
The investment was in storage facilities that clients with Sipp policies can put money into with the aim of renting them out to people to generate an income.
In 2012 Adams put £50,000 into a Carey Pensions Sipp, which was then used to acquire six storage pods in Blackburn.
However, five of the six storage pods were empty after six years and were marked down to 20 per cent of their original value, the court heard.
Legal representatives for Adams said: “What has happened is that [Carey Pensions] were relying on introducers to sell your Sipps for you. This is one transaction that involves persuading someone to transfer their pension into a Sipp and invest in Store First. There is the paper work inbetween.”
In response, Hallett said: “No. We never relied on any other companies to market our products. We are only a Sipp administrator that takes into account the execution for the client only. We don’t consider their financial position and recommend they take financial advice.”
Adams was also paid an inducement of £4,000 into his savings account to encourage him to go for the Store First investment, he claims.
When legal representatives of Adams asked Hallett if this was reported to any authorities, she says: “We did report it to HMRC but I cannot remember if we reported it to the FCA.”
Store First earned 12 per cent commission on the use of store pods.
The trial is expected to come to a close today.