View more on these topics

Watchdog warns over Sipp claims

IFAs could face misselling allegations after the Chancellor’s U-turn

Advisers who recommended clients to set up Sipps to invest in residential property from A-Day could now face misselling claims, warns the Financial Ombudsman Service.

Despite residential prop- erty being permitted in Sipps from A-Day under the Finance Act 2004, Chancellor Gordon Brown’s pre-Budget report shock U-turn last week means that advisers could still be held liable.

IFAs’ frustration is being compounded by the Revenue still offering consumers advice on property in Sipps on its website.

FOS spokesman David Cresswell says IFAs could be liable because they had a duty to make it clear to their clients that putting residential property in Sipps after A-Day was only a possibility.

He warns that the FOS will investigate complaints from clients who claim to have suffered a loss from cashing in regulated investments or switching existing pension arrange- ments into a Sipp based on advice to invest property in the wrapper.

But Cresswell adds 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 unregu- lated. IFAs who advised their clients to buy property off- plan are also off the hook from the FOS but could potentially face legal action.

Informed Choice managing director Nick Bamford says: “It not only shows a woeful lack of joined-up thinking but the hypocrisy of the Government which is not meeting the standards it sets for advisers. It is completely disingenuous for the FOS to use hindsight when at no point before the pre-Budget report did the FOS or the FSA warn advisers that this might not happen.”

Aifa director general Chris Cummings: “IFAs did not ask for this. We will be monitoring anything that sounds like a regulatory warning against advisers who simply respon- ded to client demands to discuss property in Sipps.”

An HMRC spokeswoman says: “Sometimes, it takes some time for information to cross-pollinate.”

Recommended

Nichola Pease

The chief executive of JO Hambro believes boutiques now face a growing challenge with bigger companies finally responding to the threat of small start-ups but in three years her firm has grown dramatically but she says the business is still climbing and has not yet reached base camp. Interview by Nicola York.

Standard Life bond sales pass 1bn

Standard Life bond investments passed 1bn this year, the highest annunal investment in its range since launch.The provider says this represents a 40 per cent increase in the amount invested for the same period in 2004.Standard says its bond sales have been improved by the several product changes this year including improved allocation rates for […]

BGI doubles ETF range

Barclays Global Investors has launched 14 new exchange traded funds on the London Stock Exchange including the iShares FTSE/Epra European Property Index fund.

Where next for the price of oil?

Having stabilised at around $65 a barrel, many investors are questioning if the price of oil will rise, and when. Richard Hulf provides his view. Richard Hulf, manager of the Artemis Global Energy Fund, sets out his thoughts about how the oil price may move through the next six months. At the start of the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com