A SIPP is a pension product that was launched in 1989, these products were specifically created for seasoned/sophisticated investors. However, they soon started to be marketed to normal investors without a full explanation of how they worked including full details of fee structures etc.
As a result of the high fees applied to these products, many advisors convinced savers to switch to a SIPP motivated by the high levels of commission. Some advisors then encouraged clients to invest their money into investments that were not regulated and resulted in substantial loss of client’s funds.
Pressure Selling - Where you felt pressured into an investment you did not want or need
Unsuitable scheme – You transferred your funds from a current pension into a new scheme on the understanding that this would create a better return
Fees not fully explained – You were not made aware of management costs and other fees that may have been attached to your investment
No advice given on the risks – You were not advised about the risky nature of the investments and the potential negative implications
The claim will generally be made against the Independent Financial Adviser (IFA) or their network, if they are no longer trading the claim will be made through the FSCS (Financial Services Compensation Scheme).
Claims made against IFA or network can be referred to the FOS (The Financial Ombudsman Service). The maximum award by the Ombudsman is limited to £350,000. Claims that are larger can be taken down a litigation route.
Claims made to FSCS are limited to £85,000.