16 January 2019 | Comment | Article by Neil Stockdale
In December 2018 the Financial Ombudsman Service (“FOS”) issued preliminary decisions in favour of consumers who had transferred their pensions into unregulated investments through a Liberty SIPP.
According to the reports, FOS has now issued positive final decisions against Liberty SIPP, in cases brought by Anthony Philip James & Co. These will be binding on parties and enforceable through the civil courts.
Background to the Decisions
The consumers had all been introduced to the SIPP and the underlying investment by an unregulated introducer, Avacade Investment Options (“Avacade”).
Avacade provided extensive advice but were not regulated to do so. The consumers involved were cold called and persuaded to invest their pension monies into Ethical Forestry. This investment was ‘sold’ as a low risk investment involving the growing and harvesting of trees. This investment has since been subject to a Serious Fraud Office investigation and has fallen into liquidation.
The Financial Conduct Authority (“FCA”) has commenced civil proceedings against Avacade. The proceedings are in respect of the misleading statements they provided to consumers and the activities they carried out whilst not authorised to do so, breaching the Financial Services and Markets Act 2000 and the Financial Services Act 2012.
The FCA is seeking compensation for clients of Avacade and injunctions to prevent further breaches. There are set to be two trials in the proceedings; the first to determine liability and a second to calculate how much consumers have lost.
Reports confirm that the final decisions have found Liberty SIPP to be in breach of their duty of care to their clients on the following basis:
- They allowed the unregulated, unsuitable and high-risk investment to be housed within their SIPP.
- They failed to appreciate that there was a high risk of consumer detriment.
- They failed to carry out appropriate due diligence in respect of the business accepted from Avacade.
The Future of Liberty SIPP Mis-selling Claims
The FOS decisions are another positive step for consumers that have been mis-sold pensions and may open the floodgates for more FOS decisions against Liberty SIPP given that FOS aims for consistency in the decisions it provides.
What should you do if you transferred in to a Liberty SIPP?
It is important to note that not everyone who transferred into a Liberty SIPP was mis-sold. The first thing for you to do is to think about how you ended up transferring your pension into a Liberty SIPP. Your pension may have been mis-sold if:
- The risks involved were not properly explained to you
- Your personal circumstances were not properly considered by your financial advisor
- You were of an age for the investment to be deemed unsuitable for you
- You were not properly advised on how your money would be invested
- You were sold an investment that was riskier than your financial circumstances or attitude to risk required.
If any of these statements apply to you, then the best thing to do is to speak to a specialist financial mis-selling solicitor. They will be able to confirm whether you were mis-sold and what options are open to you.
We currently represent a number of clients in claims against Liberty SIPP. If you have transferred your pension into a Liberty SIPP and believe it may have been mis-sold, please contact us for a free, no obligation consultation.