Mike Morrison: Important we get to bottom of Sipp complaints

I always take an interest in the figures from the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS) about SIPP claims. A couple of months ago the FSCS forecast numbers for SIPP claims to now be at £136m for 2016 to 2017 – take away the £12m brought forward from the previous year and life and pension advisers are left with a £29m shortfall and an extra FSCS levy.At the same time the FOS indicated that it was seeing a record level of SIPP complaints. I wondered what sorts of claims were being made – my assumption was that whilst many could well be administrative, a good many would also be in relation to the investments in the SIPP.So I was interested to see that a wealth management company, under a freedom of information request, had obtained figures from the FOS showing that the number of complaints about investments under SIPPs not matching client risk appetites had declined by a third over the last two years.What should we make of this? Well perhaps we are seeing wealth managers becoming more experienced in this area and the definitions being used becoming more accurate and understandable to all parties concerned.I also wonder whether the proliferation of ‘platform SIPPS’ has become a factor. Many platforms will have risk profiling tools or allow model portfolios with access to a range of investment funds but will probably not offer the Unregulated Collective Investment Schemes (UCIS) that have caused some of the other ‘issues’.So are we making progress in tidying up the regulatory image of SIPPs? I was about to say ‘yes’ but half way through writing this article I saw that the FOS has reported a rise in SIPP complaints in the final three months of 2016 and revealed that, in the nine months between April and December 2016, there had been 1,385 complaints related to SIPPS (compared to 1,288 SIPP complaints in the same period in 2015). The percentage of complaints upheld also increased and, just to top it off, SIPPs had the joint highest percentage of upheld complaints, alongside pay day loans.It is important that we get to the bottom of this and tidy up the market – if we are encouraging people to save then it is important that they are confident that the money is safe. The ongoing consultation on pension scams will have a real chance to address some of these issues and perhaps some restriction to allowable assets in SIPPs could also assist!

Mike Morrison: Important we get to bottom of Sipp complaints

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