Green Oil SIPP mis-selling: manipulating an honest desire to invest sustainably
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People make decisions for lots of different reasons. A desire to protect the environment is high up on the list for many people. It's why so many have now stopped using plastic bags, for example. It's also why people choose to use reusable water bottles, recycle their waste, purchase low-emission cars, and more.
Wanting to invest a SIPP in an environmentally-friendly and sustainable scheme has the same motivation.
Of course, SIPP investors want to see the value of their pensions increase. This is the priority.
There are so many SIPP products to choose from, though. Many people, therefore, hinge their decision on a desire to invest in schemes that are friendly to the environment.
In the past, fraudulent and dishonest financial advisors saw this as an opportunity. That opportunity was to manipulate SIPP investors to get them to buy into sustainable and green schemes so the financial advisor could make a tidy profit.
Why Is It Manipulation?
Why were these financial advisors being manipulative?
The problem rests with the nature of the investments they were offering to SIPP investors. Many environmentally-friendly SIPP products were both high-risk investments and unregulated.
These facts place significant regulatory responsibility on financial advisors. That responsibility involves not offering high-risk and/or unregulated investment products to retail investors.
According to the regulator, the Financial Conduct Authority, these types of investment product should only be offered to experienced investors and high net worth individuals.
Therefore, even offering many of the environmentally-friendly and sustainable schemes in question was a breach of regulations. In a lot of cases, this has been deemed as mis-selling.
The Green Oil Example
A scheme known as Green Oil Plantations is a good example. It ticked all the boxes for the environmentally-conscious SIPP investor. This included a promise of healthy returns, as well as the fact the scheme involved the creation of a sustainable biofuel.
Many people, therefore, signed up – over 1,100, in fact, with many of those using their SIPP to make the investment. In total, investors put in about £24 million.
The financial advisors who sold the Green Oil Plantations scheme got 15 percent, making them the tidy profit mentioned above.
The rest was to be used to plant trees called Milletia trees on a plantation in Australia. After two years those trees could be harvested and the oil they produced could be extracted. The plan was then to turn this oil into biofuel and sell it, mostly for use in agricultural machinery.
What Went Wrong?
The Milletia trees were planted as planned but the company then went bust. As a result, the trees were never harvested, no oil was extracted, no biofuel was made, and no biofuel was sold.
Not only did investors not get the gains they expected, but they also lost all or most of their original investment.
Of course, by that stage, the financial advisors were long gone with their 15 percent commission safe and secure.
It was the pension holders, those wanting to increase their pension pot while also helping the environment, who were left with nothing.
If you are one of those people, you should get advice to find out whether you can make a claim to try to recover your losses.
