Following intensive speculation that IFAs could face misselling claims, FOS spokesman David Cresswell said that advisers who failed somehow to foresee the last-minute U-turn may be liable because they should have made it clear to their clients that putting residential property in Sipps was only a possibility.He warned that the FOS will investigate complaints from clients who claim to have suffered a loss from cashing in regulated investments or switching existing pensions arrangements into a Sipp based on advice to invest property in the wrapper after next April. The warning was at least allied with some good news for advisers. Cresswell pointed out that complaints based on losses made purely from clients putting property into a Sipp is outside the ombudsman’s jurisdiction as property and Sipp wrappers are unregulated. Despite market concerns, IFAs who advised their clients to buy property off-plan are also off the hook from the FO, but could face legal action from their clients. The FOS points out it is too early to tell whether there will be a significant number of complaints stemming from the off-plan debacle. But Informed Choice managing director Nick Bamford, like many of his peers, is aggrieved at the mere possibility of IFAs paying the price for a last-minute change of heart by a Government which introduced the rule in the 2004 Finance Act. He says: “It is completely disingenuous and preposterous of the FOS to use hindsight in this way when at no point before the pre-Budget report did the FOS or the FSA warn advisers that this might not happen.” This argument is backed by Standard Life head of pensions policy John Lawson who points out that a succession of ministers, including Treasury Chief Secretary Des Brown and Treasury Economic Secretary Ivan Lewis gave assurances in the House of Commons that there would be no U-turn. Lawson believes that clients who were advised on Sipps will blame the Government rather than IFAs. He says: “To suggest that advisers could not plan on the basis of these rules is ridiculous and it is incred- ible for advisers.” Standard, which forecast that property would represent 5 per cent of its Sipp business in 2006, has more right to be aggrieved than most. Lawson explains that the company has invested considerable resources in the run up to A-Day in gearing up for residential property in Sipps. It has bolstered its internal processes, updated its IT systems and set up numerous relationships with intermediaries and property management firms to let property on its behalf. Lawson says: “If you wanted to build up to the possibility of putting residential property in Sipps then you need to have started well before A-Day. IFAs also had to advise clients interested in taking advantage of this rule to prepare long in advance.” Aifa director general Chris Cummings believes that IFAs should not be liable. “IFAs did not ask for this. We will be monitoring anything that sounds like a regulatory warning against advisers who simply responded in good faith to clients’ demands to discuss property in Sipps,” he says. Financial Services Legal solicitor Gareth Fatchett, however, is positive that claims will be made against IFAs. He says he has already received numerous calls from worried firms, including one IFA with over 150 clients geared up to invest residential property in Sipps. Professional indemnity insurance broker PYV chief executive Neil Pointon warns any IFA that gave advice on property in Sipps could be exposed. He says that advisers should check their professional indemnity arrangements to make sure they are covered. Fishburns solicitor Clare Ward Smith believes there could be more scope for complaints than currently anticipated. She says there is nothing to stop the FOS from operating outside its jurisdiction and examining losses stemming from unregulated products such s property. This, she says, could mean clients who bought property off-plan in preparation for A-Day could still take their complaints to the FOS. She says: “Splits were also unregulated and yet the FOS still found a way to investigate them and the FOS also took a lenient approach to regulation of productswhen looking at endowments in the late 1980s, so it really stillremains to be seen what approach it will take with Sipps.” The question remains, why did Gordon Brown change his mind? After all, the potential dangers of putting property and exotic items such as fine wine into a Sipp as well as the difficulty regulating it, have been well documented.