The Financial Ombudsman Service has warned that financial advisers who recommend clients set up Self Invested Personal Pensions (Sipps) to invest in residential property from April 6th could face mis-selling claims. Despite residential property being allowed in Sipps from A-day under the Finance Act 2004, the chancellor's recent about turn means that advisers could still be liable.
The Financial Ombudsman Service have said that independent financial advisers could be liable as they had a duty to make it clear to their clients that putting residential property in this type of pension was only a possibility. They will investigate any complaints from clients who claim to have suffered a loss from cashing in regulated investments, or switching existing pension arrangements into a Sipp based on advice to invest property in the wrapper.
Our view
Only a possibliity? We thought it was LAW now! Government changes its mind at the last minute because it would not be able to afford the amount of tax relief it would have had to offer and guess who gets 'left holding the baby'?