Why are Self-Invested Personal Pensions sometimes mis-sold?

At the time of pension planning and when vetting your financial advisor, you can check that fees are clear and reasonable. However, other and less obvious reasons might indicate that you were mis-sold a Self-Invested Personal Pension (SIPP) – which has led to far too many people losing substantial amounts of money which would otherwise fund their retirements. Once you know exactly what to look out for, and of course, the schemes which have targeted investors in the past, you can best deal with protecting yourself, your money, and even claim back if you believe you have been mis-sold.

Read on to discover why SIPPs are sometimes mis-sold and how pension savers have been targeted.

Guaranteeing Returns

A mis-sold pension scheme doesn’t always begin with a financial advisor’s cunning plan to scam those willing to invest their hard-earned cash. It can be as simple as them over-promising to secure a contract with you – only for the investment to fail later. If a firm has advised a guaranteed return rate, there may be a chance that you have been mis-sold a pension plan and are entitled to compensation. No matter how much tenure a financial advisor has, they cannot predict the future and should not guarantee a set returns percentage.

Schemes positioned as “risk-free” is another example when you might have been mis-sold a SIPP. Self-Invested Pension Plans can be very successful at growing your pension pot. However, there is always a chance that a completely regulated investment can go sour. Investing is ultimately a risky business and an advisor telling you otherwise would potentially lead to you being mis-sold your scheme. 

InvestUS: A high-risk investment

InvestUS is a perfect example of how overpromising can leave pension savers in the dust. This property investment focussed on repossessed properties, renovating them, and selling them on at a profit. However, countless unfinished projects left investors with no returns after being positioned a 15% return within three years. 

Guaranteed returns and high-risk investments are both prominent characteristics of mis-selling. You might even be able to claim compensation if you were affected by InvestUS, so answer a few questions using our quick assessment tool to see if you are eligible. 

Unregulated investments

The Financial Conduct Authority (FCA) is central to legitimate pension investment schemes as it can ensure proper processes are upheld. However, investments that are not regulated can leave investors in vulnerable positions as they have no protection from financial institutions. So-called “introducers” of unregulated assets will likely target investors through cold-calling, advising them to part with their cash. These investments are highly likely to fold, which has led to industry-wide skepticism from consumers in general. This has led to an uprising from both investors and SIPP providers calling for a ban on unregulated investments. 

These sketchy investment schemes are able to access funding without the need to offer security, and unfortunately, to the detriment of pension savers.

Harlequin Property: An unregulated scheme under investigation

Harlequin Property investments seemed like an incredible money-making opportunity for pension savers at the time – developing properties in the Caribbean is an attractive investment. Though, the firm that only built a small portion of the properties is now under investigation for fraud. Also, Investment Financial Advisors were earning anything up to 15% when they sold these policies into people’s SIPPs, meaning that consumers were likely strong-armed into investing in a scheme that was unregulated and risky from the get-go.

Thankfully, investors have found reprieve from claims management firms who can help find solutions to these situations and help steer retirement finances back to where there should be – something our happy customers have benefited from.

How to resolve a mis-sold SIPP

Poor pension advice from false guarantees to concealing information about schemes like regulation status can leave pension savers uninformed about investment decisions and then financially crippled down the line. If you are concerned that you have been mis-sold a pension SIPP, get in touch with us immediately by calling 0161 968 0768. Alternatively, fill in our quick enquiry form on our website to begin your claim proceedings.