With the coming end of the PPI claims epidemic coming (August 29th 2019) which will ultimately mean the end of the mis-sold payment protection insurance scandal, and with it the opportunity for people to make a claim will also end, there is a new financial mis selling scandal set to hit Britain in the near future (and it’s already underway).
Mis-Sold SIPPS – The Next Epidemic
A SIPP (self invested personal pension introduced in 1989) is a pension plan which puts the holder of the pension in control of where the money gets invested, which leaves them open to the advances of the many pension fund managers and their introducers who would lead them to investment opportunities which may or may not play out as first anticipated (and as first claim by the sales representatives and introducers).
Enter the opportunity for a ‘Mis-Sell’
This is where things start to go wrong, with the influence of the many fund managers and their sales teams and introducers, with such vested interests in the form of heavy commissions which are awarded for successful sales, there is a large opportunity for recommendations to be made to people that are not necessarily in their best interests, in fact, many SIPP investors are led to believe that investments will yield growth percentages which ultimately don’t materialise.
In addition to this there are also situations where investors not only don’t see the returns they were promised, but they don’t see returns at all, in actual fact, they lose their money as a result of an investment in a failed product. Many British investors have lost a lot of money with mis-sold sipps.
SIPP investments are effectively products that the British pension investor can choose to place their money (or a portion of their money) into for a period of time to see expected returns (usually pitched to them at the start of the sales process) as it turns out, after extensive legal campaigning and investigation it has been agreed that when a SIPP is mis-sold, compensation could be due (often through the financial services compensation scheme – FSCS).
The start of a new claims epidemic
Claims for mis-sold SIPPs started in Britain in the last few years and it has grown in a few short years to becoming a growing market: consumers were awarded more than £405m in 2017/18, with SIPP claims resulting in individuals being awarded compensation in the region of £30,000-£50,000 in compensation for their
mis-sold pension transfers.
SIPP claims in 2016/2017 in total came in at £105m with figures the year after being almost four times that, there are an abundance of individuals needing to make a claim for this popular mis-sold investment product.
It is possible for individuals to make a claim themselves however they must deal with the FSCS themselves, meaning they don’t need to pay fees to a SIPP claim company, however this may be more challenging as they will need to handle the claims process themselves (it’s not as simple as with mis-sold payment protection insurance).
How do I know if I’ve been mis-sold a ‘SIPP’?
There are some common characteristics among cases where people have been mis-sold a SIPP pension transfer, usually it is one or more of the following:
- A) You were told that you would see returns of ‘X’ and they turned out to be something much less or the investment resulted in substantial losses.
- B) You were not told about the risks associated with the pension investment, and the investment turned out to carry a substantial risk that may have resulted in a large substantial loss.
- You were led to invest in something that was not as it seemed, for example many people that have invested in overseas property have later found out that the land was not worth the amount that was told to them or heavily implied throughout the sales process (mis-leading value proposition).
If any of this applies to you
If you feel you may have been mis-sold a SIPP or pension transfer there may be the opportunity for you to reclaim compensation, the FSCS has set aside a large pot with which to repay the British public who have been misled to invest in self invested personal pension schemes that have collapsed or not performed as promised.
The first step is to look at your paperwork and to trace your personal pensions and find out where they are invested, once you have done this it should be relatively simply to find out where your pension is invested, once you have done this you need to make the decision whether or not to use a no win no fee claims management company or research how to claim on your own behalf.