Liberty Sipp ordered to pay after Ssas due diligence failure

Liberty Sipp falls in administration with FSCS accepting claim

The Pensions Ombudsman has ordered the now defunct Sipp provider to pay compensation to a client after it did not carry out enough due diligence before allowing a pension transfer into a Ssas.

The Pension Ombudsman has ordered Liberty Sipp to pay a former client £18,500 after it found the former Sipp provider did not carry out enough due diligence checks before allowing a pensions transfer into a Ssas.

Speaking this month, the ombudsman said that the provider had a duty to protect the interest of its clients and did not carry out adequate due diligence or provide enough warnings before allowing the client to transfer their pension.

The client, Mr E, first spoke to Liberty Sipp about transferring his pension in March 2017. Initially, the client wanted to transfer the full value of his pension - £97,000 – into the Dawson Retirement Benefits Scheme, a small self-administered scheme (Ssas).

He later changed this full amount request to the smaller sum of £18,500, and the transfer was carried out soon after.

However, Mr E soon ran into problems, with concerns that his money had been lost or misappropriated by the Ssas. He complained to Liberty Sipp, stating they had not put in place the necessary procedures to reflect guidance on pension fraud.

He ordered Liberty Sipp to return the £18,500 he had invested. The Sipp provider, however, stated they had carried out all relevant checks and found “nothing out of the ordinary” with the transfer.

However, the ruling by the Pension Ombudsman this week has stated that this was not the case, and has concluded that further action was required by Liberty Sipp. They have found that there were enough risk factors for Mr E to have been put off from transferring his money.

The adjudicator stated:

Although Liberty Sipp did give advice about the transfer, it could have given warnings to Mr E and, if necessary, delayed the transfer until it obtained further information.

The Ombudsman stated that Liberty Sipp should have been more aware of the increasing level of pensions scams at the time of the transfer. They said

It was Liberty’s responsibility to put Mr E in a position where he could make an informed decision and it failed to do so.

The complaint by Mr E was, therefore, upheld, and Liberty Sipp have now been ordered to pay £18,500 into Mr E’s Sipp, as well as any compensation for any loss of investment opportunity.


Who were Liberty Sipp?

Liberty Sipp, which was formed in 2007, was a Self-Invested Personal Pension (SIPP) provider who made headlines after revelations of a lack of due diligence and mis-selling in relation to unregulated investments within their SIPP portfolio. They entered administration last month.

They used to administer around 12,800 Sipps, working with 745 advice firms across the UK, their accounts show.

Liberty Sipp had worked with an unregulated introducer called Avacade, which has been linked to a number of high-risk schemes. Often, the advice given to customers was to transfer their safe and secure pension into a Sipp, and then to invest into a number of unregulated, high-risk investment schemes such as Ethical Forestry or Global Plantations. Some of these investment schemes lost their customers most, if not all, of their investment.

The FSCS is now accepting claims for compensation against Liberty Sipp if you have been affected by their pension mis-selling. Smooth Commercial Law are currently dealing with various Liberty Sipp cases.


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 Liberty Sipp, 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.

You can contact our experienced team by calling 0800 046 9976 or by emailing



Useful links

Liberty Sipp falls in administration with FSCS accepting claims

Finance industry finds the cost of savings safety net rise due to careless SIPP firms

Liberty SIPP Mis-selling

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.