Over the last ten years, there has been a sharp rise in the number of self-invested personal pensions, SIPPs, thanks to increased flexibility and investment choices. However, many people have found that their money may not be as safe as they originally thought and SIPP compensation is now on the rise.
SIPPs are seen by many who use them as a long-term investment. Many providers bundle a variety of financial products together and deem them to be SIPPs. These can be provided directly by the banks, insurance companies, building societies, fund managers or SIPP managers. If one of these providers fails, compensation is available. However, this all depends on the type of product.
SIPP investments are often high risk, non-standard assets, making them unsuitable for the majority of pension investors. There are many investors who were offered poor advice and were mis-sold SIPPs, particularly during 2014/15. Many of these SIPPs have now become illiquid, resulting in many investors losing large sums of money.
Examples of being mis-sold a SIPP plan could be that you were not made aware of fees such as the annual management fee, or if you were not advised correctly about the risks involved and you weren’t offered alternative investment options. If you would like to discuss this with us, our experienced team will be happy to help.
If you are affected by the mis-selling of a SIPP investment, there is a possibility you may be entitled to compensation. If the product within the SIPP was regulated and authorised by the Financial Conduct Authority, FCA, or the Prudential Regulation Authority, PRA, then compensation is possible through the Financial Services Compensation Scheme, FSCS.
However, the FSCS does not provide the same level of protection to SIPPs as conventional retirement funds, which may suffer from insolvency or fraud. If the fund was insured, the FSCS extends 100% cover for the first £2,000 and 90% cover to the remainder of the fund. There is a cap of £85,000 per person per savings institution, however, the complexity of the investments within a SIPP can mean that it isn’t as straightforward as it initially seems. This is where our vast experience can be very useful.
It is unusual for a financial services company to become bankrupt due to a large amount of industry regulation, but it does happen. SIPP claims during the financial year of 2016/17 were estimated to be around £136 million, an increase of 59% year on year. There are still many investors who could be entitled to SIPP compensation through the failure or mis-selling of a SIPP.
Here at Financial Resolver, we are a highly experienced team and we deal with complex financial complaints daily. If you have suffered a financial loss through your self-invested personal pension, and wish to discuss proceeding with SIPP claims, please call or email us today.
If you have suffered a financial loss after receiving poor advice to purchase or transfer financial products from your broker, bank or Financial Advisor and wish to discuss making a claim then please call or email us today.
Mac Fin Consulting Limited t/a Financial Resolver is regulated by the Claims Management Regulator in respect of regulated claims management activities.
Its authorisation number is CRM31917. The registration is recorded on the website www.claimsregulation.gov.uk.
Mac Fin Consulting Limited is registered in England - Company Number 7782966. VAT registration - 121 9207 44. Registered and trading address: 10 Leatherline Business Centre, 71 Narrow Lane, Leicester LE2 8NA