SIPP complaints up 30% and more than half upheld in Q2 – FOS data

Sophie King reports

Self-invested personal pension (SIPP) complaints jumped by 30% in the second quarter of 2020/21 compared to Q1, according to data released by the Financial Ombudsman Service (FOS).

In quarter two of this financial year (1 July to 30 September), the FOS received 821 SIPP-related complaints and 636 in the first quarter for 2020/21. Of the complaints in Q2, 57% were upheld by the FOS, a three percentage point increase from Q1 (54%).

For Q2 in 2019, 597 SIPP-related complaints were started. That increased to 653 in the third quarter. The uphold rates were 56% and 49% respectively.

Meanwhile, the number of occupational pension transfer (OPT) complaints decreased in the second quarter, with the FOS receiving 213 compared to 309 in Q1. For the first quarter, 40% of those complaints were upheld while 41% were upheld for Q2.

Commenting on the statistics, Philip J Milton Chartered financial planner Felix Milton said he is not surprised that SIPP complaints have increased: “Markets have taken another plunge following second wave outbreaks and lockdowns, though of course we have seen increases broadly across the board since the Biden election victory.

“I think lots of people will also be struggling financially now and more and more [who] people will be feeling the brunt of the virus as such will be looking to ensure they were advised correctly.”

He added: “It’s interesting to see that occupational complaints have gone down, and I couldn’t say why that is.”

Elsewhere, Morgan Williams IFA Daniel Williams said he hopes the data is a sign of the Financial Conduct Authority’s (FCA) crackdown on the sharp end of the occupational advice market working.

In response to the increase in SIPP complaints, Williams said that while it is never good to see the numbers increase, it is important to remember most pensions held on an investment platform are now written under a SIPP structure.

He continued: “I genuinely believe the quality of truly impartial retirement advice has improved across the past five years, but there is always room to improve.

“The best way for the industry to avoid complaints is simple: genuinely do the right thing by your client and you won’t go far wrong.”