SIPP Mis-Selling: FSCS Pays Out £8.25m On Claims Against BlackStar Wealth Management
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The Financial Services Compensation Scheme (FSCS) has recently been ordered to pay out £8.25m on claims against Blackstar Wealth Management.
Blackstar Wealth Management is a West Midlands-based firm that was declared in default in January of 2020. The FSCS was required to pay this sum after numerous claims against Blackstar were substantiated by the FCA and other advisory groups.
Claims Against BlackStar Wealth Management
Blackstar Wealth Management originally came under fire in August of 2019. At that time, it was revealed that the firm had knowingly given poor investment advice to multiple clients.
The firm’s investment advice was particularly problematic when it came to pensions. Many clients have claimed that they were mis-sold pension products without being told everything they needed to know.
For example, a report published by the Financial Times Advisor reveals that one client was told to transfer her pension to a Self-Invested Personal Pension (or SIPP) and make high-risk investments that were not suitable for her.
Upon further review, it was revealed that Blackstar did not do a sufficient job of explaining the risks of these investments to the client. As a result, they were ordered to compensate her to help make up for her losses.
The Continuing Problem of SIPP Mis-Selling
SIPP mis-selling is one of the most common types of financial mis-selling.
SIPPs do have their place when it comes to investing and planning for retirement. However, they’re complex and riskier than other types of retirement investments. They should only be used by experienced investors and, in most cases, shouldn’t be recommended to the public.
The FCA is working hard to crack down on SIPP mis-selling, especially when it’s carried out by major firms like Blackstar.
Signs of Financial Mis-Selling
It’s not always easy to know when you’re being preyed upon as part of a SIPP mis-selling scheme. The following are some of the most common tactics wealth management and financial advisory companies may use to mis-sell SIPPs:
- Suggesting that transferring to a SIPP is better than a traditional personal pension plan
- Recommending a SIPP but not recommending the investments within that SIPP
- Reviewing existing pensions but only recommending transferring them into a SIPP
- Not providing adequate information on the potential risks associated with SIPPs
- Promoting SIPPs for tax benefits instead of pension benefits
- Not giving clear advice or clear explanations of rules and laws surrounding taxes, SIPPs, etc.
Remember, any time a financial advisor does not provide adequate information or clear advice on a matter, there’s a good chance that they’re trying to mis-sell you. The same is true when they try to rush you through the explanation process without thoroughly answering your questions.
Have You Been Mis-Sold?
Do you suspect that you’re a victim of SIPP mis-selling? Has a financial advisor used any of the financial mis-selling tactics mentioned above when communicating with you?
If you have concerns about SIPP mis-selling, contact our team right away. Contact us today on 0808 163 1659 or email enquiries@goodwinbarrett.co.uk so we can help you make a claim as quickly as possible.
If you have concerns about SIPP mis-selling, contact our team right away.
