You’ve probably heard lots about major banks putting aside huge sums to compensate their clients after PPI mis-selling.
Some reports suggest the final figure paid out by banks and other lenders in PPI compensation could top £35 billion.
This scandal is now out in the open, with those responsible paying what they owe for PPI mis-selling. We explore if financial providers always as willing to compensate clients?
Self-invested personal pensions
More commonly known as SIPPs, self-invested personal pensions are fast becoming the next mis-selling scandal.
Unlike PPI, SIPP operators and the introducers and IFAs that advised on SIPPs are far less willing to accept responsibility for their part in the losses their clients are suffering.
Many people transferred their defined benefit or defined contribution pensions into SIPPs on the advice of unregulated introducers who offered free pension reviews.
After reviewing people’s pensions, the introducers recommended they move their money into SIPPs. They often presented high-risk investments as sure-fire ways to grow a pension pot.
People are now starting to realise they have lost huge sums of money. This is after investments that were marketed as guaranteed, have failed.
A large number of the introducers who offered the pension reviews were unregulated. This means people have no protection from the Financial Ombudsman Service or the Financial Services Compensation Scheme.
The SIPP providers who executed the pension transfers argue they simply executed the SIPP and bear no responsibility for losses suffered by investors.
Despite the Financial Conduct Authority (FCA) issuing guidance reminding Sipp providers of their regulatory responsibilities in relation to Sipp investments, including a responsibility to treat customers fairly and undertake due diligence on the unregulated introducer and high risk investments, providers are still refusing to compensate clients for their losses.
When is legal action required?
In many cases, the providers only admit responsibility when they are threatened with court action.
There are a number of court cases, including Adams vs Carey Pensions, which will influence whether Sipp providers are liable for these losses.
If you’ve invested into schemes that have failed due to bad advice, our financial mis-selling solicitors can help you to secure compensation, even if your Sipp provider is disputing responsibility and litigation is required.