FSCS hits pension advisers with £20m interim levy
The Financial Service Compensation Scheme has slapped a £20m interim levy on life and pensions intermediaries as it deals with “bad” self-invested personal pension (SIPP) advice.
The compensation scheme said mounting costs and the volume of claims relating to bad advice to transfer funds from existing pension schemes into SIPPs was behind the interim levy.
A note to the stock exchange said, in many cases the SIPP fund was then invested in non-standard assets which have since become illiquid.
TLW have seen many cases where people have received such advice and clients have invested in things like off plan property developments, store pods, green oil, forestry projects and other high risk investments.
Initially, FSCS started making interim compensation payments to claimants where such advice resulted in lost pension growth and charges. However, the FSCS are now compensating for the sums lost in the investment too.
FSCS chief executive Mark Neale said: “FSCS is there for consumers when authorised firms go bust. It has a duty to pay compensation claims as they fall due and that helps to promote consumer confidence.
The costs of SIPPs claims are rising so we have no choice but to issue this levy to the firms that pay for FSCS protection. This interim levy will cover the costs of compensation claims until the next annual levy is available in July.”
If you have been advised to move your pension funds into a SIPP in order to invest in a high risk investment, the advice may not have been suitable for you and totally inappropriate if your adviser had looked at your circumstance properly.
TLW’s financial mis-selling team have a great deal of experience in dealing with claims for bad SIPP advice against both advisers and the FSCS.
Contact us today if you have any concerns about your pension investment.