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Sipp due diligence – is your investment at risk?

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A recent decision has left providers of self-invested personal pensions (Sipps) with many questions. Not carrying out enough due diligence could see providers fail to meet regulations. As a result, investors could complain to the provider to get compensation for their losses.

Berkeley Burke Judicial Review decision

The recent decision in the Berkeley Burke Judicial Review found that the Pension Ombudsman Service (POS) had made legally incorrect decisions in previous cases.

It was ruled that the Sipp providers should bear responsibility for due diligence and while clients may have requested the investment, it is up to the provider’s as experts to ensure the investment is correct for the client.

In the case of our client Mr Richardson, he lost £30,000 after investing with Carey Pensions. Carey allowed the investment but the scheme was not suitable for the client. However, if due diligence had been carried out, Mr Richardson would not have made the investment.

We’re currently pursuing justice for Mr Richardson through the Courts. Read more here.

Commercial property investments

Questions are now being asked about commercial property investments. In several cases, Sipp providers own the commercial property that investors buy into.

As the property owner, the Sipp provider is responsible for insuring the building. Advisers have suggested that Sipp providers are not checking that property investments owned by them are properly insured.

It’s been suggested that commercial properties may be inadequately insured, especially with smaller Sipp providers. This could mean that an investment could be a much higher risk than investors expect.

Although these schemes are sold as safe, incorrect insurance could lead to huge losses for investors if the insurer will not or cannot pay out in the event of any issues arising.

Sipp providers offering investments in properties should carry out the same level of due diligence as any other type of investment. Inadequate insurance can lead to a scheme failing and investors being left out of pocket.

This could be the next big investment scandal as commercial property investments are on the rise. Some providers are reporting up to 20 percent increases into this type of scheme.

Due diligence

Following the Berkeley Burke decision, the floodgates have been opened for clients of Sipp providers such as Liberty Sipp and Carey Pensions. Thousands were let down by providers due to a lack of due diligence. As a result, many lost their life savings. We are working on behalf of victims to ensure they get back their pensions and receive adequate compensation for their suffering.

We can tell you if the due diligence carried out on your Sipp was inadequate. If it wasn’t, you may be owed compensation. Get in touch with our experts today.