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Everything You Need To Know About Mis Sold SIPP Compensation

Written by Jimmy Rustling

Everything You Need To Know About Mis Sold SIPP Compensation

If you have money in a SIPP and you’re not happy about it, you might be in good company. Have you suffered significant losses in your SIPP account? Do you feel that you were misled about your pension? Maybe your SIPP is underperforming, or you were not adequately informed of the potential dangers. Perhaps you felt rushed into transferring your current pension to a SIPP that didn’t meet your needs.

You may be eligible for compensation if you believe you were mis-sold a pension or given poor investment advice by a Financial Adviser or SIPP Provider. Find out more here,

Have you been a victim of mis-selling? 

In such instances, individuals, on the recommendation of an adviser, establish a SIPP and subsequently invest in a high-risk, unregulated asset class.

A self-invested personal pension, or SIPP, is a pension in which the retiree takes responsibility for making investment decisions. In essence, it’s a do-it-yourself pension fund that gives you greater freedom to choose from a wider range of investment options than you can with a traditional pension.

Millions of people have decided to invest their savings in SIPPs over the past 30 years due to the many advantages they provide, such as the ability to invest in a wide variety of securities, spread risk through multiple accounts, take charge of one’s financial future, and avoid certain taxes.

Nevertheless, many advisors have misguidedly suggested that their clients move their old pension into a SIPP and afterward invest in one of many unregulated high-risk, unethical, or unsuitable investment schemes.

In most cases, a client will ask their financial advisor to select an investment for their SIPP, and the advisor has a responsibility to do so in a way that prioritizes the customer’s unique requirements and goals. Read more on this page.

Despite this obligation, many advisers are breaching their duty of care by encouraging investors to put their money into schemes without first investigating the program or learning the client’s tolerance for risk. And so, those investors have suffered financial losses, sometimes to the point of total ruin.

Another issue with SIPPs mis-selling has been the exaggeration and overselling of benefits, with many advisers promising huge returns in a short period of time on investments that turned out to be a waste of time.

What else to know? 

Several financial advisers have been accused of “severe and ongoing shortcomings” by the Financial Conduct Authority with respect to investments made through SIPPs. The most common problem is that financial advisors don’t check to make sure their clients’ SIPP investments are secure and appropriate.

It is becoming more and more obvious that mis sold SIPPs have been made to a large number of investors, many of whom have suffered the loss of their life’s savings as a direct result of receiving poor advice or making risky SIPP investments due to unscrupulous advisers who frequently take advantage of commission incentives.

It is believed that as many as one in eight people who have saved money were marketed a pension that was not suitable for them, and more and more instances of SIPP mis-selling are being discovered each and every day.

As a response to the continuously expanding nature of this issue, the Financial Services Compensation Scheme (FSCS) has established a compensation fund of one hundred twenty million pounds sterling (£120 million) for those who have been wrongfully sold SIPPs.

If any of the following apply to you, you may be able to file a claim for financial compensation:

There was terrible advice offered to you

You lost money because, for instance, your financial planner or SIPP provider gave you bad advice about your options or because their advice was unreliable or careless.

You were persuaded to put your retirement funds in a SIPP that did not meet your specific needs

You didn’t realize that your financial advisor had put money into high-risk assets that weren’t subject to any oversight. For instance, your financial advisor or SIPP provider may have suggested that you move your conventional pension into a SIPP and then make investments in other forms of high-risk, unregulated financial instruments.

There was a lack of transparency on the possible risks 

Your financial planner or SIPP provider failed to present you with a thorough and clear explanation of the risks and potential drawbacks associated with your investments.

You were not given enough information by your SIPP provider to make a well-informed choice 

You should not have moved forward with the investment or followed the advice if you had known more. many people will try to trick you into investing in something big without having all the relevant information to rely on.

You are in a worse financial position now 

The value of your SIPP may have decreased, for instance, notwithstanding your financial advisor’s or the SIPP provider’s assurances to the contrary.

There was no mention of income tax consequences

For instance, you may have unintentionally increased your tax bill by going over the threshold for tax-free income. It’s possible you were even informed tax evasion was possible.

You didn’t plan for the unforeseen expenses

You may have been promised assured high returns that never materialized, for instance, or you may have been subjected to additional hidden costs and inexplicable fees tied to your SIPP investments due to a lack of transparency. For instance, your SIPP adviser may have given you false hopes about your investment results.


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About the author

Jimmy Rustling

Born at an early age, Jimmy Rustling has found solace and comfort knowing that his humble actions have made this multiverse a better place for every man, woman and child ever known to exist. Dr. Jimmy Rustling has won many awards for excellence in writing including fourteen Peabody awards and a handful of Pulitzer Prizes. When Jimmies are not being Rustled the kind Dr. enjoys being an amazing husband to his beautiful, soulmate; Anastasia, a Russian mail order bride of almost 2 months. Dr. Rustling also spends 12-15 hours each day teaching their adopted 8-year-old Syrian refugee daughter how to read and write.