Adviser trade body Libertatem is asking financial planners to contribute to the cost of Sipp provider Berkeley Burke’s legal battle against the Financial Ombudsman Service.
The lobby group has decided to lend its weight behind Berkeley Burke’s appeal, helping form its legal case as well as raising donations.
Last October, Berkeley Burke lost a High Court appeal against a FOS decision after a lengthy fight over what responsibility Sipp providers should have to vet client investments.
The original FOS ruling in 2014 found against Berkeley Burke for failing to carry out adequate due diligence on a £29,000 unregulated collective investment scheme.
The judge’s ruling on appeal last October was that checking an investment in a foreign country was effectively an application of existing due diligence requirements, which Berkeley Burke did not meet and was therefore liable for losses.
The Sipp provider won the right to go to the appeal court when the judicial review failed, with hearings due to recommence this October.
Libertatem director general Garry Heath tells Money Marketing that meetings have now been held with various stakeholders over Berkeley Burke’s defence, and that financial planners should also be taking an interest because, if FOS wins, “they will use this precedent as a hammer – not only on other Sipp players but also on all advisers.”
Heath says the legal teams plan to argue that the FCA has obstructed government policy; the government instituted Sipps as a vehicle in which individuals decide their own investment, but now cannot without the Sipp company or adviser “effectively acting as guarantor”.
Heath says: “It is no longer just about a Leicestershire Sipp provider who has fallen foul of retrospectively applied rules, but has instead become about the power of the FOS and the FCA to use principles to change the game at will.
“Libertatem will be offering help as requested, both because it’s an important case that affects every adviser but because the Berkeley Burke advisory firm is a member.
“After the huge expense of a five-year legal fight, Berkeley Burke is looking for financial help from those with a stake in the outcome in order to keep the case going to appeal. The financial services industry needs Berkeley Burke to win this case.”