The Financial Ombudsman Service (FOS) has ruled that The On-Line Partnership has to compensate a client after they were given unsuitable advice to transfer their pension into a self-invested personal pension.
The On-Line Partnership advised their client, Mr P, to invest into unregulated schemes via a self-invested personal pension (SIPP). Mr P complained to the FOS about the unsuitable advice, which was given by an appointed representative of On-Line. The client stated he was given the advice by Bragagnini Associates Financial Solutions (BAFS) before he came to On-Line. Smooth Commercial Law currently have a number of mis-selling claims against Bragagnini Associates.
The unregulated schemes Mr P was advised to invest in follow a familiar trend – agricultural investment scheme Green Oil Plantations, overseas property firm The Resort Group, and UK-based storage company Store Pods.
The client argued that he was not a high net worth or sophisticated investor and, as such, these high risk, unregulated collective investment schemes were not suitable for him. Mr P was an accountant who was earning around £38,000 a year, and did not have any experience of speculative or unregulated investments.
Client to be compensated for loss caused
The FOS reviewed the complaint and determined that The On-Line Partnership could not give suitable advice on the combined SIPP and investments without taking into account the investment itself.
This is an interesting ruling, as SIPP administrators have been denying they have responsibility for the investments up until this point.
The FOS upheld Mr P’s complaint and has asked On-Line to pay compensation, including paying any future fees owed to the SIPP for the next five years, and £300 for the trouble caused.
There are currently 37 upheld FOS complaints against On-Line published on the FOS website. Smooth Commercial Law are also dealing with a number of complaints against Bragagnini Associates Financial Solutions relating to mis-sold SIPPs.
What are SIPPs and how could you be mis-sold one?
SIPPs were introduced in 1989 as a method for UK citizens to take greater control of their pensions pot. They were created, however, for experienced investors due to their risky nature. These investors would be able to take more risks, but the financial product was never intended for the general public.
SIPP transactions are sought after by financial advisors due to the high fees that are involved. This leads to many advisors telling their clients to transfer into a SIPP even when it is not suitable. A lot of the time, it is simply for the commission.
Savers can lose thousands by investing their money into SIPP schemes which are very high risk, such as overseas property investments, plantations, storage pods and car parks. If the risks are not properly explained by their financial advisor, they are liable.
How can Smooth Commercial Law help?
At Smooth Commercial Law, our team of experts have extensive experience in dealing with a whole manner of claims that arise from negligent and/or unsuitable financial advice. We are seeing an increase in claims for mis-sold pensions and SIPPs, and have managed to secure compensation for many of our clients.
Should you have a claim against Bragagnini Associates, we can deal with your case and look to recover compensation for not just your loss of investment but also any adverse tax liabilities that you may now be facing as well.