Organic Mis-Sold SIPPs – NJ Associates and Greyfriars SIPP… What Happened?

SIPPs seem like a good option on paper – a chance to diversify your pension investments and generate a better financial return. However, if you’re mis-sold a SIPP product, it could result in a significant loss of funds.

That was the problem encountered by clients of NJ Associates, and those who invested in The Organic Bond Fund A, and The Organic Long, and Short Alpha. Here’s more information about the situation, and what happened when the extent of the mis-selling scandal was revealed.

How did it start?

The issues started in 2016, when the FCA stated that it had given Organic Investment Management ‘numerous warnings’ over their poor compliance and oversight controls. The company was managing approximately £70 million of SIPP assets via five model portfolios and two Ucits funds (which the portfolios were invested in). These two funds were The Organic Bond, and The Organic Long / Short Alpha.

It was discovered that these funds were exposed to potentially high-risk assets – something that had negative implications for their investors.

What then for the SIPPs funds?

In 2018, the FSCS revealed that it had received 80 claims against Organic Investment Management Limited. This discretionary fund manager was associated with The Organic Bond and The Organic Long (and Short) Alpha SIPPs products, which were high-risk, and lost customers significant sums of money.

In December 2018, the FCA issued a request asking that Organic cease conducting regulated activity, due to growing concerns about the nature of their investments. The company went into administration shortly after this.

NJ Associates – compensating ex-clients

However, Organic weren’t in it alone. NJ Associates (who have now collapsed), were involved in the situation too, as they’d been advising clients to invest in an Organic SIPP. Claims were also made against them. In February 2020, NJ Associates were declared in default, which meant they were unable to pay out the compensation that they owed their previous clients.

According to Companies House, NJ Associates (Financial Services) was listed as a creditor, for the sum of £219,000. 16 individuals had filed a claim, but at the time, the FSCS stated that it was too early to predict exactly how much compensation would be paid out.

GRSL SIPP (Greyfriars)

SIPP provider Greyfriars was also caught up in the scandal. An FSCS investigation found that the firm had specific issues regarding the GRSL SIPP, and that several claims were being made against them. Hartley Pensions purchased the Greyfriars SIPP in January 2019, which was made up of 1,600 SIPPs, 160 SSAS, and close to £500 million in assets.

Companies like NJ Associates were recommending that clients should invest with Greyfriars – which caused serious problems for those that did, then lost a substantial amount of their savings as a result. 

Greyfriars was declared in default in April 2020. If you’re concerned that you’ve been mis-sold your SIPP from any of these firms, get in touch with us today via our contact form.

Have you been a victim of mis-selling?

Although NJ Associates, Organic Investment Management and Greyfriars have all collapsed, that doesn’t mean you can’t seek compensation. However, first of all, you’ll need to determine if you’re an eligible candidate.

Ask yourself if you experienced any of the following:

• A pressurised process. When switching your pension to a SIPP, you should be free to examine all your options, without feeling rushed or pressurised to commit. If you felt you were hassled into making a decision, this suggests you’ve got reason to make a claim.
• Lack of information. NJ Associates were under obligation to explain the SIPPs properly to you. If they failed to go through the details, that counts as mis-selling.
• The risks weren’t explained to you. The Organic Bond and Organic Long / Short Alpha SIPPs were found to be riskier than they’d been portrayed to investors. This is a clear-cut case of mis-selling, and if you’ve got either of these SIPPs, you’re in a strong position to make a claim.
• No risk-assessment. It’s standard practice to assess a client’s attitude to risk, to ensure that they’re provided with a suitable range of SIPP products to choose from. The firm should have checked what level of risk you were happy with, then made recommendations accordingly.

 

How to seek compensation

Goodwin Barrett specialise in obtaining compensation for mis-sold SIPPs and other investments. To find out more about how we can help you, give our team a call today on 0808 163 1659 or email enquiries@goodwinbarrett.co.uk.

 

References

https://www.ftadviser.com/regulation/2020/03/24/fscs-receives-80-claims-against-failed-dfm/

https://www.moneymarketing.co.uk/news/carey-ruling-could-affect-greyfriarss-sipp-liabilities/

https://citywire.co.uk/new-model-adviser/news/high-risk-investment-fears-prompt-fca-to-act-against-dfm/a1199698

https://www.ftadviser.com/regulation/2020/02/18/fscs-pays-out-on-adviser-linked-to-failed-dfm/