- June 25, 2018
- Posted by: cooperstern
- Category: Uncategorized
For many years, financial advisers have been persuading pension savers to invest in high-risk products, many of which are unregulated.
Prominent examples in recent years have included storage pods and luxury hotels. However, in many cases these investments fail to realise the expected returns, leaving pension savers lumped with an undesirable and often worthless asset, as i news reports.
Much of the present difficulties began with the introduction of pension freedoms in 2015, which led many people to move their retirement savings out of “defined benefit” schemes, which pay a guaranteed income for left, into self-invested personal pensions (Sipps). Although Sipps do allow for greater investor freedom, they have also opened the floodgates to unscrupulous providers and advisers who have found new ways of mis-selling. As a result, more than 13,000 people have been paid compensation relating to Sipp claims so far, with compensation totaling hundreds of millions of pounds over the past five years.
How to get compensation
A person who believes they may have been mis-sold a Sipp can makes a claim to the Financial Ombudsman Service (FOS) if the claim is against a live Company regulated by the FCA, or the Financial Services Compensation Scheme (FSCS) in cases where the Company is dissolved (it must still have been regulated by the FCA).
FOS has a compensation limit of £150,000.00, whereas the FSCS can pay out a maximum of £50,000.00 per person. Statutory interest is also paid on any redress awarded. In 2017/18 FOS received 2,051 claims relating to Sipps, of which 52% were upheld. This represents a significant increase on the figures for the previous two years, with 1,493 Sipp claims received by FOS in 2016/17 and only 697 complaints on the subject received in 2015/16.
As such, there is now significant and mounting pressure on both financial advisers and Sipp providers to safeguard people from unsuitable investments in order to prevent further mis-selling. However, caution is recommended when dealing with Sipps – if you receive a cold call about your pension, the best thing to do is hang up.
Protect your Pension
Here are some steps you can take to avoid being mis-sold a Sipp:
- If you receive a cold call about your pension – Hang up;
- Always use a regulated financial adviser – So you can go to FOS or FSCS if something goes wrong;
- Avoid unregulated investments – don’t be lured in by “incentives”;
- Don’t sign blank documents, and always make sure you fully understand the terms of the investment and any fees charged, such as advice fees and investment fees.
If you fear that you may have been a victim of mis-selling, contact Cooper Stern today. Our team have the expertise and experience to advise individuals and businesses on a wide range of financial misconduct issues. Please use our online enquiry form or call us on 01204 322 805 for your no-obligation consultation.