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33 advisers currently under FCA investigation

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The Financial Conduct Authority (FCA) has revealed that 33 advisers suspected of providing “poor advice” are currently under investigation.

Suspected of giving poor advice

The revelation comes from a letter written by Megan Butler, FCA executive director of supervision. She explained that the regulator was not willing to tolerate SIPP due diligence failures. She stated that an unregulated introducer or financial adviser is usually behind poor investment advice. 

Butler expanded: “We have 33 open investigations into advisers we suspect have given poor advice and we are considering which action to take in each place.”

In addition to the investigations, the FCA has already prohibited four financial advisers. Another has been banned from holding senior positions as a result.

Due diligence failings

Butler’s letter was penned in response to MP Frank Field, chairman of the Work and Pensions Select Committee. Field questioned Butler over the FCA’s enforcement measures against Sipp providers.

Butler divulged that two Sipp operators have been referred to the enforcement and market oversight division of the regulator. This action comes in response to due-diligence failings on non-standard investments.

Unregulated investments are here to stay

Field mentioned the possibility of prohibiting unregulated or non-standard investments from inclusion in Sipps. He questioned Butler on whether the FCA might consider implementing such a ban.

However, Butler revealed that the regulator was not considering such an action. 

Our leading financial mis-selling specialist, Glyn Taylor believes the FCA should go further to protect retail customers.

He said: “The Sipp trustee has a specific duty not to accept an underlying asset without taking reasonable steps to ensure they are able to undertake realistic annual valuations. If the investment is high risk and illiquid then it shouldn’t be accepted as it is inappropriate for a Sipp investment by a retail customer.

“To avoid this from happening there should be a prohibition on Sipp operators allowing non-standard assets into a Sipp where the investor is a retail customer.”

Complaints over collapsed Sipp providers

Butler went on to acknowledge the Financial Services Compensation Scheme (FSCS) is receiving ongoing complaints in relation to collapsed Sipp providers. The companies Brooklands, Stadia and Montpelier were all announced default in January. 

The managing director of Montpelier was also subject determined “not fit and proper”. This is on the basis of due diligence failings on introducers and Sipp assets.

If you have invested your pensions via a Sipp and think you could have been mis-sold get in touch with our expert solicitors today for advice on seeking compensation.