Well done to the Financial Conduct Authority (FCA) for banning two advisers who convinced nearly 2,000 people to transfer their pension arrangements into Self Invested Personal Pensions (SIPPs) which were then invested in unregulated investment schemes such as oversea property plans and even diamonds.
The FCA review of the the client files uncovered a whole host of problems primarily about lack of suitability.
Many of these clients were seeking security and certainty of retirement income and the last thing they needed was a volatile and high risk investment.
SIPPs can be a very good way to manage a pension fund.
As an efficient tax wrapper offering a wide range of investment choice they have become increasingly more popular.
But the SIPP is really just a tax wrapper. What matters is the investment “engine room”.
It seems these advisers were selling their clients a “Mercedes” SIPP but with less than a “two stroke engine” under the bonnet.
And potentially this is yet another situation that will result in claims under the Financial Services Compensation Scheme (FSCS).
In other words the majority of advisers will yet again be paying for the misdemeanours of the few.
Still it’s only another £112 million down the drain, so nothing new there!
