Sipp provider denies unregulated introducer ties as court battle continues

High-Court-Building-700.jpgSipp 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.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. So Carey acted in total ignorance to what they were doing, they simply made a specified investment knowingly ‘sold’ by an unauthorised introducer using unapproved marketing material, no doubt they also let the unauthorised introducer complete all the paperwork, act as principle contact and relied on their assurances that the scheme was genuine.

    Common sense would tell you this was wrong let alone the FSMA 2000 and the Thermatic Review 2009 neither of which Carey’s would let get in the way of easy money.

    Justice should be done unless the Judge wishes to ignore both document

  2. The only way for SIPPs to go is to limit investments to regulated funds, listed securities and things that are tangible and can be readily valued or realised.

    I am sure that there have been many examples of circumventing rules and misselling which will eventually land at the door of the SIPP provider, as all the crooks are long gone with the spoils of their deception.

    Just another example which proves that if we want to clean up our industry, we have to go back to basics and do the simple things that will earn the trust of consumers. If we close off the distribution channels we save ourselves a lot of aggravation and cost, which ultimately is borne by the consumer.

  3. I think the damning issue is the £4k “inducement”. Where does this cross over from inducing to bribery. The Bribery act came in in 2010 so I can’t see why this is solely a civil and not a criminal case case.https://www.legislation.gov.uk/ukpga/2010/23/section/1

    • I don’t think it does, because I don’t see the s3 “relevant activity”.

      The £4k seems fairly clearly to be pensions liberation though, so if the claimant in this case hasn’t declared it to HMRC I’m sure he either has had or will have an interesting chat with them.

  4. ‘Cash back’ offers were often seen prior to freedoms as a means of liberating some pre-pension assets prior to the individuals retirement date allowing such.

    I personally received a text offering such along the suggested high investment returns would then follow.

    I went as far as to discuss the way it would work with those behind the unsolicited text.

    Ignoring for a moment the naivety or otherwise of Carey, the key issue is whether there was a link between them and Commercial Land beyond that of adviser / provider.

  5. Reading the press reports I would say this is NOT the strongest case against a Sipp provider I’ve read particularly of the face to face warnings issued by Carey – others had no direct client contact whatsoever. Each case should be reviewed on its merits and not generalised on mass

  6. take the high road 23rd March 2018 at 7:56 pm

    …other SIPP providers watch out for this ruling….!

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