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On the Assist.Claims Blog you'll find interesting articles about pensions and investments as well as news and links to other items we find on the internet concerning the financial claims industry. The government is constantly reviewing legislation on pensions, investments and mis-selling and financial institutions are under increasing pressure from financial regulators.
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“Buyer Beware” SIPPS with investment in Elysian Fuels

An article in FT Adviser last autumn (FT ADVISER 29 October 2015, written by Ruth Gillbe) highlighted an issue with a recent SIPP investment choice. 

Self Invested Personal Pensions (SIPPs) are usually recommended to experienced and more sophisticated investors. The charges tend to be higher than Personal Pensions which usually offer life assurance funds with charges as little as 1% per annum. 

Although the SIPP investment proposition is far more expensive, it offers virtually unlimited investment scope to include direct shares and commercial properties and other more specialist securities. The SIPP provides the tax efficient wrapper which holds the underlying investments. An initial fee is usually charged plus annual costs by the SIPP provider. The Financial Adviser usually recommends both the SIPP provider and underlying investments, for which he is also paid by the client both for the initial and usually, the ongoing advice.

The SIPP provider will perform some due diligence on the underlying investment however in some recent cases the shares involved have become worthless, as in the case of Elysian Fuels which have been written down to zero from £1.00.

Investors will have cause to complain to the original Adviser if all the risks and costs were not fully explained from outset.

Although the Elysian Fuels case maybe extreme, there have been many other cases recently where the underlying investment proposition sounded too good to be true and ultimately proved to be a reminder of the old adage,  "Buyer beware".

(Gary Naylor is a Partner in Assist.Claims, regulated  by the Claims Management Regulator, and who specialise in obtaining compensation payments for clients who have been mis sold Personal Pensions, Annuities and SIPPs)

Read the original FT Adviser article here:

http://www.ftadviser.com/

 

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