Have you been a victim of bad financial advice when it comes to your pension? Have you invested in a Self Invested Personal Pension (SIPP) scheme and lost a significant amount of money due to the mis selling of unregulated products? If you have, it’s essential to understand the SIPP claim process, so you can receive the compensation you’re entitled to.
How do SIPPs differ from standard personal pension plans?
SIPPs differ from standard personal pension plans because they allow investors to choose the type of investments they wish to make within their SIPP. SIPPs are suitable for larger pension pots because of the high commission and pension investors who have an interest in the Stock Market.
Examples of SIPP Investments
Self-Invested Personal Pension Schemes (SIPPs) were created to provide a way for experienced investors to have more control over their pension investments.
However, many people in the UK have been advised to transfer their existing pensions to a SIPP, often to their detriment. In some cases, small pensions have been transferred into these schemes, resulting in high charges that make them less valuable.
In other cases, people have been advised to invest in unsuitable or high-risk products, which can be damaging to their finances and leave them with worthless investments upon retirement.
Non-standard investments such as storage pods, eco-products, and agri-products, among others, are often put into SIPPs, generating huge commissions for advisors.
These investments have been mis-sold, and many people may be entitled to seek compensation. A pension may have been mis-sold if the advisor didn’t explain the risks, failed to consider the individual’s personal circumstances, didn’t inform them about how their money would be invested, or encouraged them to purchase a high-risk investment that wasn’t in their financial interest.
Are SIPPs a bad financial product?
SIPPs are not inherently bad financial products. However, they can be mis-sold, and investors can lose significant amounts of money if they’re not careful.
Why have SIPPs been mis sold?
Historically, bad financial advisors have taken advantage of the availability of SIPPs to advise pension investors to transfer from defined benefit or defined contribution schemes into SIPPs and thereafter “invest” in high-risk, esoteric, or unregulated “investments.” Such “investments” paid excessive commissions to the advisor, sometimes in the order of 20%/30% of the amount invested.
Financial advisors, whether authorised by the Financial Conduct Authority (FCA) or not, have taken advantage of the availability of SIPPs to advise pension investors to transfer from defined benefit or defined contribution schemes into SIPPs and invest in unregulated products.
If a regulated financial advisor recommended a transfer to a SIPP and an investment in unregulated products, this would give rise to a mis-sold SIPP claim for compensation.
The mis sold pension claim process
If a financial advisor is regulated, a claim for compensation for a mis-sold SIPP can be made to the financial advisor if they’re still trading. If the claim is denied, then redress can be obtained by making an application to the Financial Ombudsman Service (FOS), which currently has the power to award up to £375,000 in compensation against the advisor.
What can we do to help?
If the financial advisor was regulated by the FCA but is no longer in business, a claim can be made to the Financial Services Compensation Scheme (FSCS), which has the authority to award up to £85,000 in compensation for any advisor who has gone out of business since 1 April 2019 (the financial limit of compensation prior to this date is £50,000).
If the financial advisor was not regulated by the FCA and advised on a pension transfer to a SIPP and an investment in unregulated products, a claim for financial compensation can very often be made against a SIPP company. In the event that the SIPP company has gone out of business, a claim can be made to the FSCS.
To enable a claim to be commenced, it’s important to have as many documents available as possible. Over time, many pension investors mislay documents. However, this is not necessarily fatal to a claim. Under the Data Protection Act 2018, a request can be made of a pension company to supply copies of all documents to the person affected. Under the Regulations, the pension company has 31 days in which to respond. This is known as a Data Subject Access Request (DSAR).
Involving the Financial Ombudsman Service
The Financial Ombudsman Service can only deal with cases where the company against whom a complaint is made is authorised by the Financial Conduct Authority.
In the first instance, a complaint should be made to the company that was responsible for the bad advice. Ideally this should be in writing and sent by recorded delivery.
The company then has eight weeks in which to respond. If the company denies liability or does not respond within the eight week period a complaint can then be made to the Financial Ombudsman Service who will then investigate the complaint and arrive at a decision.
Time limits on SIPP Claims
The primary limitation period is six years from the date of the bad advice. In the case of a pension transfer this would normally run from the date that the funds are transferred.
However, there is a secondary limitation period which starts from the date that the pension investor knew or ought to have known that they had received bad advice. Very often this would be deemed to have started to run on the date that they became aware for example that any investment had failed.
It is very important to bear in mind that time limits are crucial and any delay in bringing a claim can result in it being dismissed as being out of time.
Why you don’t want to go this route alone
It can be difficult to navigate the SIPP claim process alone. Working with a team of experts can help you understand your rights, navigate the process more easily, and increase your chances of success.
Will you be charged for our help?
At Pension Justice, we work on a no-win, no-fee basis, which means that we only charge a fee if we are successful in helping you make a successful SIPP claim. Our fees are transparent, and we will explain them to you upfront, so you can make an informed decision about whether to proceed with our services.
Our track record with SIPP claims
Our team at Pension Justice is led by Managing Director Paul Higgins, a highly experienced solicitor with over 40 years of legal expertise, particularly in the field of litigation. With his leadership, all cases are personally handled by him from start to finish, ensuring clients receive the highest level of legal service.
In addition, we have established strong connections with specialised barristers, independent financial advisors and experienced paraplanners to support our clients’ needs. Our team is dedicated to recovering compensation for clients who have been mis-sold pensions and we have a wealth of experience in doing so.
Clients can trust that their case is in good hands with our team of legal experts. We have successfully recovered millions of pounds on behalf of our clients in relation to pension mis-selling cases, showcasing our strong track record in the field.
If you believe you have been mis-sold a SIPP, it’s important to act quickly to protect your rights and seek the compensation you deserve. At Pension Justice, we have the expertise and experience needed to help you navigate this complex process and secure the best possible outcome.
Our team of legal experts will guide you through every step of the process, from gathering evidence to submitting a claim and negotiating with SIPP providers and the regulators. With our help, you can rest assured that your case is in good hands and that you have the best chance of receiving the compensation you deserve.
Contact us today to schedule a consultation and learn more about how we can help you with your SIPP claim.