Complaints about self-invested personal pensions rose to 241 from April to June this year, compared with 132 in the same period last year, the Financial Ombudsman Service’s latest quarterly figures have shown.
A spokeswoman for the Fos told FTAdviser that the increase is down to more complaints being brought by an unnamed complaints management company/legal firm and the majority of complaints are about the advice to invest in unregulated funds via a Sipp.
In May the Fos figures revealed that Sipp complaints almost doubled to 1,039 cases in the 12 months to April compared with the previous year, with 63 per cent of complaints being upheld. The uphold rate has now dropped to 53 per cent.
Law firm RPC recently predicted that Sipp complaints would be exacerbated by the recent pension reforms, blaming “the inevitable confusion and opportunities for mistakes following the unexpected changes announced in the Budget”.
In April the Financial Conduct Authority issued an alert to advisers, signalling its toughest stance yet on recommendations to clients to transfer their pensions into self-invested alternatives weighted to “non-mainstream investments”.
The alert warned that advisers need to be careful in ensuring their Sipp advice was suitable as the watchdog’s supervisory work found “very poor standards of advice” and that it expected further referrals to its enforcement division.
Yesterday (21 July) the FCA revealed in a ‘dear CEO’ letter to Sipp provider bosses that Sipps are still failing to manage risks and ensure customers are protected appropriately, despite recent guidance.
This stems from the regulator’s third thematic review of the Sipp market which found that the failings identified put UK consumers’ pension savings at “considerable risk” from scams and pension fraud.
