Complaints about self invested personal pension have almost doubled to 1,039 cases in the 12 months to April compared to the previous year, according to The Sunday Times.
Data from the Financial Ombudsman Service, to be published later this week, reveals that almost three quarters of the complaints stem from advice to invest life savings into unregulated and unsuitable investments. The Fos upheld 63 per cent of complaints, the Sunday Times said.
In March, FTAdviser revealed the regulator has told several Sipp firms to suspend supporting non-mainstream investments as it finalises its third thematic review in the sector. Many market commentators believe the review will lead enforcement action against providers.
The Financial Conduct Authority’s latest probe, alongside its long-awaited capital adequacy paper, is expected to be published at the end of June.
Two members of the Association of Member-directed Pension Schemes told FTAdviser the FCA had revealed during discussions that it continues to find failings within Sipp firms, especially relating to esoteric investments.
The complaints to Fos are more likely to be directed at the advisers who recommended their clients to invest in esoteric investments such as overseas property or biofuel projects, which are not covered by the industry compensation scheme.
The findings come as evidence mounts of growing dissatisfaction with Sipps firms among advisers. FTAdviser sister publication Financial Adviser’s service awards support the notion that advisers do not rate the service offered by Sipp providers.
Last year, Dentons Pensions was the only bespoke specialist Sipp provider to receive five stars for service and the only one to achieve more than three stars.
Of the other bespoke specialist Sipp providers: AtSipp, Rowanmoor, Suffolk Life and James Hay received three stars, while Hornbuckle Mitchell, London & Colonial and Barnett Waddingham all garnered just one star.
Carney warns over mortgage support
People could be stopped taking out mortgages worth many times their salary to buy new homes, the governor of the Bank of England has said.
According to the Telegraph, Mark Carney said in a televised interview yesterday that capping the size of mortgage ratios to salaries was one measure the bank was considering to controlling the housing market.
The bank is also keeping an eye on the government’s Help to Buy scheme – in which the government gives people taxpayers money to cover deposits on new homes worth up to £600,000 - following reports the scheme is fuelling house prices.
The warning comes after the bank disclosed in March that mortgages larger than four times borrowers’ incomes accounted for the “highest share of new home loans are running at their highest level than at any time since 2005”.
Mr Carney suggested that the bank could impose a new “affordability test” for borrowers as well as reining in the government’s Help to Buy scheme which provides taxpayer-backed guarantees for homebuyers.
Previously, three former chancellors of the Exchequer - Lord Lawson, Lord Lamont and Alistair Darling – warned the second phase of the Help to Buy scheme, which guarantees very high loan-to-value mortgages, has the “potential to inflate a future housing bubble”.