More Unregulated SIPP Investment Warnings

More Unregulated SIPP Investment Warnings.

The financial industry regulator, the Financial Conduct Authority (FCA) has yet again issued a warning to the pensions industry and financial advisers about dealing in unregulated collective investments for clients Self Invested Personal Pensions (SIPP).

Warnings were issued repeatedly last year, and indeed a number of financial advisers, are now in default or being investigated for recommending investments for clients SIPPs that are not regulated and have no investor protection.

The mostly publicised ones being clients investing in offshore residential properties and holiday lets.

Comment

We will repeat the FCA’s warning:  There are “serious and ongoing failings” and that the public should be made aware of and taken into account of, at all times the existing transfer “suitability” and the “underlying investments intended to be held within the SIPP”.

We have come across a number of clients who have approached us, after the event, with unregulated investments or property developments that have then collapsed meanings clients have lost money or they may not get some or all of their money back.  The driver behind these unregulated investments is that advisers are paid huge commissions, sometimes as high as 9-10%.

Our guidance is simple:

• If it looks too good to be true, it probably is. 
• Always agree a set fee with your adviser when looking at any investment or pension.  Do not work on % and find out if any “commission” or indirect financial benefit will be paid to your adviser for arranging such an investment
• Get it in writing
• Take a second opinion from us before going ahead.