At Claim My Loss (HT Legal), claims involving SIPP operators have been at the heart of what we do from day one.
When we first entered into claims involving SIPPs the Financial Services Compensation Scheme did not uphold complaints against SIPP Operators, only Financial Advisers. It was the work carried out by solicitors and claims management companies against companies like Liberty SIPP that led to the FSCS changing their stance and accepting that as FCA regulated companies, SIPP providers had a duty of care when allowing investments on their platforms.
This opened up the door millions of pounds worth of compensation for UK consumers which may not have been available to them had they not had professional parties involved. Today, any UK consumer can bring a claim to the FSCS directly because of the people that came before them.
However, some clients will have received a maximum payout of £50,000 and others may have had £85,000 when often this is not enough to cover the extent of their losses.
However, there may be other opportunities to make claims involving SIPPs which you have not yet explored.
If you thin you are due further compensation due to investing via a SIPP then book a call with our claim specialists today.
FCA Tightens Oversight on SIPP Operators Amid Consumer Risk Concerns
SIPP operators in the UK, were given a lit of freedoms for a long time however now the regulator are firmly committed to putting things right.
The UK Financial Conduct Authority (FCA) has voiced new concerns over the operations of SIPP operators, which could mean further risks to consumers. As it increases its surveillance on firms in the financial sector, including pension administrators, this latest update reflects consumer protection and greater transparency in the industry.
Ramped-Up Scrutiny for SIPP Operators
The recent findings of the FCA show a worrying incidence of non-compliance by some operators, which indicates that protection for consumers’ financial well-being is not provided by such operators. From the FCA analysis, the potential risk to investors is about inappropriate investment options that don’t match their goals. Many UK investors are attracted to SIPPs because they are flexible and offer the widest range of investment choices. Thus, the lack of due diligence by some operators creates many concerns.
While it is a major benefit of flexibility provided by SIPPs, it brings along corresponding risks-in fact, specifically when SIPP providers permit investment in high-risk or perhaps even unregulated assets. The FCA has emphasised that some operators do not carry out the required checks for determining suitability of investments offered to clients. Therefore, there’s an increased possibility of investors unintentionally accepting higher risks than they anticipate, which might adversely endanger their long-term financial security…
These types of claims were once very common and whilst many of the non compliant operators have ceased trading the FCA clearly still have some concerns.
Enhanced Regulations
The FCA requires SIPP operators to have stronger standards of care and transparency than ever before. There are checks that are considered full in scope checks and will ensure all investments are suitable for a consumer and comply with regulatory requirements. The FCA has also sent several warnings to the firms, stating that the next step is firmer action on such failure.
The FCA cautions the investor further. It advises the investor to seek clarifications regarding the investment strategies his or her SIPP provider has in place and also the level of transparency involved. To the FCA, asking the consumers to consult their professional advice on the issue and checking their portfolios time and again is necessary for a better informed and vigilant attitude toward investment.
This was highlighted with the Scorpion initiative in 2013 and has become a major part of building claims against both SIPP providers and pension schemes who allow clients to transfer away.
FCA’s Commitment toward Consumer Safety
This proactive stand from the FCA shows how the FCA is committed to protecting UK consumers. Their attempt to mitigate these risks so that more of the people will not end up with unsuitable investments that could jeopardise their future financially is the right approach.
Pensions play a key role in most retirement plans, so the kind of actions taken by the FCA is vital in safeguarding the interests of UK consumers.
In fact, it is this type of approach that will ensure the SIPP and pension sector sees continuous improvement and oversight. Recent warnings by the FCA should prompt these SIPP operators to improve their standards and allow the FCA to take pro-active enforcement action if they are not satisfied with the outcome to protect UK pension savers.
Way forward
SIPP operators will have to show they can become adaptable to even stricter standards of doing business. Compliance is no longer an option, the approach toward ensuring clients investments are both suitable and secure goes beyond being reactive for SIPP operators. Investment due diligence is at the heart of everything which can often be taken care of by simply not allowing assets that don’t measure up to regulated standards onto the SIPP platforms.
Ultimately bringing their practices in line with FCA expectations will build stronger client relationships and longevity for their business.
Conclusion
These FCA warnings are really reminders for due diligence, transparency, and accountability in the SIPP sector. SIPPs by their nature provide access to a wider range of investments however investments that offer higher growth potential inevitably carry greater risk, especially the likes of cryptoassets or unregulated investments.
Proper management of which assets are allowed on their platforms is essential to shield consumers from unwarranted risks.
As the FCA pushes for better standards, the SIPP industry is going to be a safer and more reliable one, offering much security to UK investors who rely on these products for a smooth retirement.
Today we see two common types of SIPP Claims:
People who are concerned they lost money by transferring into a SIPP
People who have had had compensation on their SIPP but didn’t recover all of their losses.
In both cases our team stand ready to help you navigate the complexities on a no win no fee basis.
You can book a free 15 minutes call with one of our SIPP experts today or start your claim here.
