The Financial Ombudsman Service (FOS) has upheld a self-invested personal pension (SIPP) mis-selling complaint related to a high-risk investment made within a Guinness Mahon pension.
The complaint, made by solicitors Anthony Philip James & Co (APJ) on behalf of a client, is believed to be unique in receiving a decision while many other cases appear to be halted.
The FOS adjudicator concluded that Guinness Mahon should have refused the introduction of business because they were aware the client was given advice by unregulated introducer Avocade, which is now the subject of a criminal investigation by the Serious Fraud Office, and is facing legal action from the Financial Conduct Authority (FCA).
The adjudicator has stated that the firm should have had doubts over the competence and motivation of Avocade and been aware that its business model was likely to result in consumer detriment.
The FOS has ruled that Guiness Mahon should have refused the introduction of business and should pay fair compensation.
Guinness Mahon now has the opportunity to appeal the decision.
The decision comes as APJ has issued five legal cases against Guinness Mahon. The five claimants have alleged Guinness Mahon worked with unregulated introducers to facilitate SIPP investments into non-standard assets which were not suitable for their needs.
The cases relate to investments between 2013 and 2016, into schemes including ethical forestry and global plantations.
APJ is also preparing to issue a further 20 cases against the SIPP administrator in the coming weeks, believed to be the largest number of cases issued against Guinness Mahon.
APJ solicitor Glyn Taylor said: “We welcome this decision by the FOS as it is consistent with the FCA’s view that SIPP operators should not accept high-risk, illiquid investments in a SIPP as they are manifestly unsuitable as a pension investment.
“We’re aware that very few SIPP decisions are being made by the FOS and we’re pleased that due to the hard work of our expert legal team our client has been awarded redress for the losses they’ve suffered.”
More claims coming
In May, Professional Adviser revealed AJP has also issued more than 30 claims against Liberty SIPP relating to underlying unregulated investments.
Liberty SIPP’s claimants were invested into a range of schemes, including ethical forestry and global plantations, following instructions from Avacade
Taylor said the FOS should make similar decisions in the cases against Liberty SIPP.
Yesterday, it was revealed the FCA is concerned about non-standard investments in SIPPs, but currently has no plans to ban them.