Billions of pounds have been lost through unregulated or high risk investments into Self Invested Personal Pensions. Some believe it’s because a number of Financial Advisers, SIPP operators and Unregulated Introducers have abused the product, using them as a means to get pension money invested in high risk, unregulated investments.
Nearly always, such investments appear attractive, with “high returns and more control over your money”. Overseas holiday developments, storage pods, green energy, diamonds and farmland. All exciting projects to be involved with, especially when you see the glossy brochures showing stunning pictures and forecasts of how your pension will grow.
Harlequin Property, a development in the Caribbean, serves as a good example:
Financial Advisers persuaded hundreds of British Pension Savers to pour more than £400m into the scheme. The scheme was to deliver 6,000 ‘stunning holiday apartments’ in the Caribbean. But only around 300 properties were built. The capital disappeared into thin air, leaving the Pension Savers with nothing more than their glossy brochures and collapsed pension pots.
The most common chain of events of how mis-sold Sipp investments begin is also quite consistent. An introducer or agent will contact the Pension Saver offering a free pension review. If the Saver expresses any interest in their investment pitch (high returns, being in control), an introduction is made to the regulated Financial Adviser…the investments are then made.
Each year, we hear hundreds of stories of how people plough their life savings into unregulated investments within a SIPP. We also hear how people transfer their secure Final Salary Pensions to fund these high-risk projects. Losing your retirement savings in such a way is nearly always devastating, both financially and emotionally.
A mis-sold SIPP is a pension product that is unsuitable for the client it was sold to or has been sold in a misleading way.
Most mis-sold SIPPs are unsuitable because the investments they contain are high-risk, unregulated and do not match the risk profile of the client.
Many mis-sold SIPP clients have been mis-led about the performance of the investments they contain. In many mis-selling cases, this is usually done by an Unregulated Introducer who cold-call people and uses a marketing tactic known as offering a free pension review.
This is designed to persuade people to transfer their pension, often promising high returns, but downplaying the risks associated with the investment.
The majority of investments associated with these SIPPs are unsuitable for the average retail client, and should only be recommended to people with a certain risk profile and investment experience.
SIPPs are not suitable for everyone because of the underlying investments they contain.
They are also unsuitable for people with little investment experience or who do not have the understanding and capacity for risks associated with this type of pension scheme.
Pension savers mis-sold a SIPP have their hard-earned money ploughed into unregulated investments, often for the investment to perform poorly, sometimes to the point where the entire pension fund is lost.
SIPP Complaints made to the Financial Ombudsman Service totalled more than three thousand in 2018 and they are the most complained about pension product against Financial Advisers.
For mis-sold SIPPs alone, The Financial Services Compensation Scheme (FSCS) paid £123m in compensation in 2018 – 2019, £11m higher than the previous year.
If you were advised to invest into a Self-Invested Personal Pension without being prepared for the risks, you may be due compensation.
Mis-sold SIPPs are a scandal which has blighted the pension industry for decades. As the years roll on, more and more people realise they have been conned.
Pension Claim Consulting are specialists in winning compensation for mis-sold Sipps. Our clients can expect up to £85,000 with the Financial Services Compensation Scheme, if the firm is no longer trading. Should the firm still be trading, an application to the Financial Ombudsman Service can be made – the maximum award is £375,000.
The important thing to remember is to check your pension history. Many people have grounds for a claim without realising.
Examples of unregulated investment Sipp schemes:
You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.
It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.