Mis-sold Investment Specialists - Call For a Free Expert Claims Assessment
0808 163 1659

Back to blog overview

Berkeley Burke, SIPP mis-selling and the need for clearer regulation

Published on:

SIPPs (Self-Invested Personal Pensions) allow you to select your own investments for your pension, offering greater financial freedom. However, in recent years there’s been considerable controversy surrounding SIPP providers and how they conduct their business, with many investors losing money as a result of their practices.

The Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS) are there to protect investors by regulating firms that provide financial services and products. But the big question is - are the regulations clear enough?

Berkeley Burke vs the FOS

In October 2018, Berkeley Burke lost their High Court appeal against the FOS. It was ruled that they had not carried out appropriate due diligence for one of their clients who invested in an unregulated collective investment scheme.

Berkeley Burke contested the decision, claiming that it created retrospective due diligence obligations for other firms. Their comments raised an important question – do SIPPs providers have a clear enough understanding of exactly what their responsibilities are?

The Broad Principles

As it stands at present, the FOS are within their rights to interpret the following two principles as they wish:

  • Companies must conduct their business with due care, diligence and skill.
  • They must regard the interests of their customers and treat them fairly.

The application of these principles are not always straightforward, however, which is where the issues arise. After all, if financial firms aren’t 100% certain what due diligence, care and skill looks like in real terms, especially for new products, it makes it difficult for them to know exactly how to carry out their business while remaining within the law.

Certain practices which don’t satisfy these principles become so commonplace that they form a convention. In simple terms, if some companies are doing things a certain way, then other companies might presume their way is correct, without realising that the principles are in fact being broken.

The final ruling against Berkeley Burke even acknowledged that the approach they adopted regarding due diligence may well be common practice among SIPPs providers across the country – but asserted that this practice wasn’t a good one.

Highlighting the Failings

The Berkeley Burke case has highlighted significant failings in the system (and with the SIPPs providers themselves), when accepting business from both regulated and non-regulated advisors.

Such investments included: Ethical Forestry Sustainable Timber Investments, Global Plantation Investments, Sustainable Agro energy, Gas Verdant Investment and Gravity Child Care Limited.

The problem is, clients probably don’t know if their advisors are regulated or not until they experience issues. And, without an in-depth code of conduct, SIPPs providers are unsure how to discharge their duties appropriately. It’s a vicious circle and needs to be addressed.

Resolving the Problem

To protect clients (and financial companies), detailed rules need to be in place, specifying the steps the SIPPs provider should undertake when selling investment products. Given that the FCA first started regulating SIPPs back in 2007, this is something that seems long overdue.

Mis-sold Your SIPPs?

If you suspect that you’ve been mis-sold a SIPP, Goodwin Barrett can help. To find out more, get in touch today by calling 0808 296 2762.

Request a call back

If you'd like us to call, please fill in your details

Why choose us?

  • Hassle-free process.
  • No lengthy paperwork to complete.
  • Your own dedicated claims expert.
  • Claims settled within 8 weeks on average.
More About Us

Speak to our friendly experts

If you feel you've been let down by your bank or financial adviser please call us.

Call today 0808 163 1659

Customer Stories

We've helped thousands of people win compensation as a result of unsuitable financial advice.

William Thornley I’m absolutely delighted with the service we got from Goodwin Barrett, I couldn’t believe how easy it was and i’ve nothing but praise for them
Alan Parton This was an excellent result which my wife and I never expected. My sincere thanks to you for such an excellent achievement, I cannot thank you enough
Stuart Snowden After sending a report to Santander, they agreed with our findings and awarded Mr Snowden an amount of £7,000 made up from a refund of the losses together with interest and compensation.
William Miller This was a fantastic result I never expected. My sincere thanks for such a prompt and efficient service.
Margaret Long I am so grateful to your company but especially to Steve Wise for getting me the money back
Janet Rynkiewicz We reported our findings to Halifax and within a matter of weeks had secured our client the sum of £26,700 in compensation.
Fred Hardman After we sent a detailed complaint to Halifax, Fred was delighted to receive £6,916 from the bank in a matter of weeks.
Stephen Montague Having investigated the complaint Lloyds TSB agreed that the advice was unsuitable and agreed to pay the clients £10,000.

Figures shown are before the deduction of our fee.