You may have noticed that the AIGO fund has been in the news recently – and not in a good way. If you think you might be impacted by investing in this fund, or you’re curious to know more about it, read on.
What was the AIGO Fund?
The AIGO fund (AIGO Holdings PLC) was a high-risk investment that was popular a few years ago into which many people invested their pensions. A non-standard asset listed on the Mauritius Stock Exchange, the fund was represented by two regulated financial advice firms, Financial Page and Henderson Carter.
In many cases, the fund was mis-sold to pension holders for whom it was not a suitable investment option. The two firms engaged in highly pressurising sales tactics, and pension holders invested into the fund without being properly prepared for the level of risk, without being properly informed about the nature of the fund, and without being given a real chance to understand what they want. This misconduct is a classic case of financial mis-selling.
What Happened to the AIGO Fund as a Result?
In 2016, AIGO Holdings PLC was ordered by the FCA to stop all pension switching / transfers. They were also forbidden to jettison any assets without permission. Then, in July 2018, AIGO Holdings PLC was given a petition to wind up.
As a result, the funds are anticipated to collapse completely, which means those who have invested in the fund will lose money. For some, this might only be a small amount. However, for those that transferred all their savings into the scheme, it could be a financial disaster.
What's Happening in the News?
The Financial Services Compensation Scheme (FSCS) has already paid out over £5.7million to compensate those who received bad financial advice and invested into the AIGO fund. At present, the complaints have been against Financial Page (or Andrew Page) and Henderson Carter. Both firms have now ceased trading, but the impact of their actions continues to be felt.
This isn't the first time that huge pay-outs for SIPPs-related advice have been made. Thanks to the growing numbers of claims coming through, the FSCS recently announced plans to raise the amount levied from the industry to £336million, showing just how much of an issue it is becoming.
What Happens Now?
The Financial Times highlighted the need for more action to protect both investors and their financial advisers, expressing its shock "at the sheer volume of poor advice relating to SIPPs and non-standard or unregulated investments, especially as this was caused by just two relatively small advice firms."
Likewise, SIPPs providers should be encouraged to take more responsibility, tackling the issue from the roots up.
Are You a Victim?
If you were involved in the AIGO mis-selling scandal, the good news is that you may be entitled to compensation. This is especially the case if:
- You feel that the level of risk wasn’t sufficiently explained to you.
- You weren’t told that the fund wasn’t being regulated by the FCA.
- You didn’t understand the nature of the fund.
- Your attitude to risk wasn’t adequately assessed.
To find out if you’re eligible for compensation, talk to one our advisors today.