16 January 2019 | Firm news | Article by Neil Stockdale

FOS Upholds Liberty SIPP Complaints

It has been reported that the Financial Ombudsman Service (“FOS”) has recently issued decisions in favour of consumers who have transferred their pensions into unregulated investments through a Liberty SIPP.

According to the reports, three adjudicators have issued decisions against Liberty SIPP, in cases brought by Anthony Philip James & Co.

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. The first hearing has been listed for January 2020.

FOS’s Decisions

Reports confirm that the adjudicators’ 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 Mis-selling Claims

The decisions made by the adjudicators are still open to appeal and are not yet final and binding.

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.

This news follows the recent refusal of SIPP provider Berkeley Burke’s application for Judicial Review of a FOS decision made against them. Read more about that here.

It also follows a positive FOS decision concerning the mis-selling of a Qualified Recognised Overseas Pension (“QROPS”), see the blog here.

In light of the above, it will also be interesting to see the outcome of the ongoing litigation against Guardian Pension Consultants Limited and Carey Pensions LLP concerning their role in pension mis-selling.

What should you do if you transferred in to a Liberty SIPP?

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.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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