Financial loss on Self Invested Personal Pensions (SIPPs) with Liberty SIPP

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Many people have suffered financial losses by investing or transferring their pension funds into a Self Invested Personal Pension (SIPP) provided by Liberty SIPP.

We are acting on behalf of a large group of clients who have suffered financial losses on such funds. If you are similarly affected then we would like to hear from you as we may be able to assist you in bringing a no win, no fee claim against Liberty SIPP to recover your losses.

This has led to people suffering devastating financial losses on their pension funds and in some situations, these funds are now worthless.

On many occasions, Liberty SIPP have used these products as a wrapper for investment of pension monies into funds and asset classes which are both high risk and unregulated. This has led to people suffering devastating financial losses on their pension funds and in some situations, these funds are now worthless.

One recurring example of this that we have encountered is where Liberty SIPP have used pension funds for investments into Ethical Forestry Ltd.

This involved using the SIPP to invest in Melina tree plantations in Costa Rica. Customers were often led to believe that they would achieve a high yield profit over time once the trees were harvested. Unfortunately Ethical Forestry Ltd became insolvent and the prospects of investors receiving their money back are now deemed to be low.

As well as the problems with SIPPs used to invest into Ethical Forestry Ltd, we are also aware of particular problems and instances of high levels of financial loss on the following SIPP investments;

  • Store First (Storage Pod investments)
  • GAS Verdant (Australian Agricultural land investments)
  • Templeton Securities (AIM stock investments)
  • ISP Securities (Carbon credit investments)
  • Sovereign (Green and Environmental investments)

How are Liberty SIPP liable for losses?

Liberty SIPP may be liable for the financial losses suffered by their customers on these types of SIPP investments due to several important statutory and regulatory provisions.

The Financial Services & Markets Act 2000 expressly prohibits anyone from giving advice on ‘regulated activities’ unless they are authorised to do so by the Financial Conduct Authority (FCA). A ‘regulated activity’ includes advising and arranging deals on investments.

Therefore, any advice concerning a transfer or investment into a SIPP constitutes a regulated activity and should only be provided by those who are appropriately authorised by the FCA.

While Liberty SIPP are authorised by the FCA, in our cases the initial contact regarding potential SIPP investment was often made by a third party who are unauthorised and who are not regulated.

These unauthorised third parties act as an introducer to Liberty SIPP, but we feel that on many occasions they have performed a regulated activity by advising on and arranging deals on investments.

In such circumstances it may be possible to establish that Liberty SIPP are liable for losses caused by reliance upon the advice. This is because Section 27 of the Financial Services & Markets Act 2000 allows a customer to recover losses which have been caused by making investments through authorised firms where this follows advice or recommendations made by unauthorised firms.

We have also encountered instances where the initial contact with a customer was made through an unsolicited cold call. This practice is generally discouraged and the Chancellor announced in the last Autumn statement (November 2016) that a consultation process will be undertaken with a view to banning such business practices.

We are proceeding with a significant number of cases where our clients have suffered financial losses after being introduced to Liberty SIPP following unsolicited advice given by an unauthorised and unregulated third party. We would welcome contact from anyone who has been similarly affected.

Other duties owed by Liberty SIPP

As a company whose business activities are authorised and regulated by the FCA, Liberty SIPP themselves are subject to strict professional standards.

They must abide by rules and regulations prescribed by the FCA. Breaches of these provisions could mean that they are held responsible financial losses that follow.

We believe that Liberty SIPP have breached several important, fundamental regulatory rules prescribed by the FCA with regards to the dealings they have had with customers who invest into SIPPs which they provide.

For example, the Financial Ombudsman Service has previously stated that pension companies such as Liberty SIPP have a duty to warn customers not to proceed with unsuitable SIPP investments. They should therefore take into account the personal circumstances of each individual customer. We feel there are numerous situations where this has not occurred.

Investments into high risk, unregulated funds and asset classes can expose the capital to a much higher level of risk than the individual was prepared to take. It may be that, by transferring to a SIPP, they are also forfeiting attractive benefits accrued through existing occupational or private pension plans. We feel that Liberty SIPP should have taken factors like this into account and may have failed in the duties owed to their customers if they have omitted to do so.

If you have suffered financial loss as a result of investing or transferring a pension to a fund with Liberty SIPP then Neglect Assist may be able to help. Please call us on 0800 152 2620 for free and without obligation advice.

Relevant Case Studies

Mr S from Surrey
received
£57,000

He held two mainstream personal pension funds worth a combined total of slightly over £57,000. He did not have any significant savings or investments elsewhere and therefore wanted to be cautious with how these pension funds were used.

Mrs B from Kent
received
£30,000

She had a mainstream personal pension fund valued at slightly over £30,000. This was the entirety of her retirement savings and she was reliant upon this money for her future retirement. Due to this, she required a low risk pension savings strategy which would keep her capital secure.

Mr B from Manchester
received
£32,000

He had pension savings of slightly over £32,000 and did not want to take any risks with this money as he was approaching retirement. He would therefore have little opportunity to make back any losses which may potentially be suffered through higher risk investments.

Ms N from London
received
£18,000

She had an occupational pension fund of around £18,000 and required a low risk option which would preserve the capital she had and offer a reasonable rate of future growth. She was not seeking an investment with high elements of risk involved.

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Mis-selling or mis-management by a SIPP Operator?

Have you suffered financial losses on a SIPP operated by a SIPP operator? If so, then you may have grounds for bringing a No Win No Fee claim.

Some SIPP operators have entered into dealings with third party advisers who are not authorised and regulated by the Financial Conduct Authority to give pension or investment advice. This is despite their regulatory body publishing alerts and giving warnings against such actions.

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Mis-sold or mis-managed investment or pension?

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  • Your personal circumstances or attitude to risk wasn’t properly considered
  • You were sold a SIPP or poor returning annuity
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