For years, expats who transferred their pensions into a SIPP or QROP have been persuaded to invest significant sums into investments which were far riskier than they appeared. From luxury hotels in the Caribbean to storage pods and even coloured diamonds, investors were persuaded to gamble away their life’s savings by firms and individuals who failed to consider the individual circumstances of their clients.
Often beginning with a cold call, often from an overseas call centre, and the promise of significant – supposedly guaranteed – returns, investors were not informed of the huge risks associated with these non-standard investments.
We are now seeing action in the form of large compensation payments to investors
Last year, the Financial Services Compensation Scheme (FSCS) paid out £105 million in compensation on SIPP claims, a dramatic increase of more than a third on the £78 million paid out the year before. This year the FSCS has put aside £375 Million for compensation claims.
It has now been announced that another three SIPP providers have been declared in default: This is when the FSCS is satisfied that the firm is unable to … pay the claims made against it, meaning the FSCS will potentially pay compensation to investors up to certain limits.
The FSCS has received claims for compensation against Brooklands Trustees, Stadia Trustees and Montpelier Pension Administration Services, all related to how these firms have administered SIPPs and QROPs by allowing investors to put their money into a host of non-standard investments. The fact that the FSCS expects overall SIPP mis-selling claims levels to continue rising is a good indication that we are currently only scratching the surface of the number of individual investors who may have been persuaded to make these investments, and so could be considered for compensation.
The issue isn’t with SIPPs and QROPs, it’s with the less scrupulous advisers and providers who have allowed their SIPP to house questionable investments, with no real value, which investors have been encouraged into making.
In the offshore market, according to the HMRC figures, 110,000 QROPs were sold mainly by unregulated, unqualified advisers who gave unsuitable and inappropriate advice.
The potential scale of this mis-selling scandal is enormous.
If you believe you are due compensation for a mis-sold QROP or SIPP, please get in touch today. Email firstname.lastname@example.org