Momentum SIPP – Another Mis-Selling Scandal
Mis-sold SIPPs are a growing issue, affecting thousands of people across the UK. Consumers are being encouraged to switch their traditional pension pot to a SIPP product, but in some cases, this puts their retirement funds at risk.
This was certainly the case with the Momentum SIPP – and the hundreds of steel workers adversely affected by transferring their British Steel pension to this pension product (among others). Customers were also given bad investment advice from firms like Intuitive Financial Associates – we’ll be examining their activities too.
Here’s more information about the situation.
Momentum SIPP provider – where it all started
Momentum Pensions introduced their first SIPP product back in 2014, then a cheaper alternative SIPP two years later. Prior to this, the firm had dealt exclusively in offshore pensions (Qrops).
The SIPP gave investors the option to transfer to a Qrops if they decided to emigrate to another country; an offering that was unique to Momentum at the time. Stewart Davies, chief executive for the pension provider, commented: “with our quality discretionary fund manager partners, we are confident that we have created a fully flexible product that advisors can recommend to their clients.”
At the time, one industry expert predicted that the company’s background in Qrops would “ring alarm bells” with reputable advisors.
Momentum SIPP – The British Steel scandal
In 2017, the media was awash with reports about steelworkers at Port Talbot, who had been encouraged by advisors like Intuitive Financial Associates to swap their existing British Steel pensions for an alternative like a Momentum SIPP.
The steelworkers were told that they had a choice - transfer their current pension into a lifeboat fund and miss out on some of the benefits they’d previously been promised, or switch to a SIPPs product. Unsurprisingly, many chose to invest in a SIPP.
The situation proved confusing for many, with one steelworker commenting: “I don’t need my money put in investment to grow. I don’t even know who has got it at the moment. Is it Momentum? Gallium? Vega Algorithms?”
The issues with the SIPP
Many of the workers weren’t told about the risks involved with the Momentum SIPP, which was associated with now failed brokers like SVS Securities.
One industry expert commented: “If you’re in a final salary scheme then you’re covered by the Pension Protection Fund if your employer goes bust. If you transfer out, you lose that protection. You’re also at the mercy of stock markets, so you could end up losing a big chunk of your pension if your investments don’t perform well.”
Additionally, it appeared that financial advisors hadn’t offered personalised advice to the steelworker clients. For example, one individual had his pension switched into the same scheme as other workers, despite the fact that he was far younger than them, and had more years until he was due to retire.
This is a clear-cut case of SIPP mis-selling. If this has happened to you, remember that you can seek compensation – call us today on 0808 163 1659 to find out more.
Intuitive Financial Associates – inadequate advice?
Four advisory firms were caught up in the mis-selling scandal – and among them was Intuitive Financial Associates. It’s believed that there are others, which haven’t yet received complaints against them.
One of the key issues was the lack of information given to steelworkers about the future of their SIPP investment. Both workers and MPs complained that the advice given focused too much on the point of transfer, without examining the ‘pensions journey’, and the possible outcomes of swapping to a SIPPs pension.
In March 2020, the FSCS declared Intuitive Financial Associates in default, and it’s thought that more claims are likely to be made against them in the future.
Have you been mis-sold to?
If you’re a steelworker caught up in the pensions scandal, ask yourself the following:
- Did your advisor (Intuitive Financial Associates or otherwise) explain the SIPP product to you?
- Were the risks outlined properly?
- Were you given a full range of pension options?
- Did you feel ‘left in the dark’ about where your pension pot was being invested?
- Were you pressurised to switch your pension?
If you felt that you didn’t understand the Momentum SIPP, or the risks involved in switching your pension, you’re in a good position to make a claim.
Goodwin Barrett specialise in helping people who have been a victim of pension mis-selling. To find out if you could be eligible to receive compensation, call us on 0808 163 1659 or email firstname.lastname@example.org.
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