SIPP Mis-Selling: FCA Ban IFAs Who Provided Misleading Information to Clients
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There are many types of SIPP mis-selling practices, and one of the most common is providing false or inaccurate information. Many investors put money into a SIPP, only to find out later that the risks weren’t explained to them properly, or that there were hidden fees, or other costs they weren’t made aware of.
However, the FCA’s recent decision to ban two independent financial advisors (IFAs) for their misleading information may deter others from doing the same. Here’s more information about the case, and the implications for the future.
What did the IFAs do?
A FCA investigation found that, in 2013 and 2014, Peter Howson and John Butterfield (IFA directors of Vanguard Wealth Management Ltd) had given false information about the high net worth of their clients to James Hay, a SIPP provider.
As a result of this misleading information, more of their clients purchased shares in Elysian Fuels – a non-standard, high-risk investment. This didn’t work out well for the customers, but generated Howson and Butterfield a considerable profit from both commission and fees.
Taking action
After this came to light, the FCA banned the pair from practicing as IFAs, and commented that they had “no place in the financial services industry”. A spokesperson for the FCA added: “Both advisers knew, or should have known, that what they were doing lacked integrity and betrayed the high standards expected by the FCA.”
Alex Kovach, James Hay’s chief commercial officer, stated that the SIPP provider was “pleased that the FCA is taking steps to eradicate those ‘bad apples’ that undermine investor confidence”.
High net worth investors – a bigger issue?
The FCA has been concerned for some time about the exemptions offered to high net worth investors. A HNW investor is defined as someone who generates an annual income of over £100,000, or who possesses over £250,000 of net assets. However, some argue that this definition needs to be reviewed. It’s been in place for several years, and the value of money has diminished considerably since then.
What protection do SIPP investors have?
The law has changed recently, and now, the FCA are able to issue a penalty to an IFA, six years after they received notice that the misconduct was taking place. This only applies to acts of misconduct that occurred after 25th July, 2014.
If you’ve been mis-sold your SIPP, you should seek compensation for your financial losses. Many investors recoup thousands of pounds as a result of making a claim.
Were you given misleading information about your SIPP?
When you transferred your pension to a SIPP, did any of the following occur?
- You weren’t informed about the risks involved.
- You weren’t given information about what the SIPP was invested into.
- You weren’t made aware of all the fees involved with the SIPP.
- You were confused by an aspect of the SIPP, and your financial advisor didn’t resolve this to your satisfaction.
If any of the above sound familiar, you may have been mis-sold your SIPP. To find out if you can make a claim, get in touch with Goodwin Barrett today on 0808 163 1659 today or email enquiries@goodwinbarrett.co.uk.
