Complaints related to self invested personal pensions were the most upheld by the Financial Ombudsman in disputes between firms and clients since April, according to the service's data.
The ombudsman's latest quarterly update also provides details of all complaints received. This shows the most commonly upheld complaint since the start of the financial year was for related to Sipps (58 percent upheld), compared to 34 percent of investment ISA complaints, 31 percent of mortgages and 28 percent pension transfers.
The figures for Sipp complaints chime with data from the Financial Services Compensation Scheme from July, which revealed it had paid out nearly £77m in claims relating to Sipps, as it continued to see a high volume of claims involving advice given by financial advisers to invest in the pension vehicles and to hold within them investments in high-risk, non-standard asset classes, which have often become illiquid.
Elsewhere in the Fos update, the ombudsman service pointed to a lack of familiarity with the small print and the workings of crowdfunding investments and loans, highlighting these as the top causes of disputes about this new area of financial services.
Crowdfunding is still a relatively low area of complaint, but the ombudsman sees such FinTech services which challenge the role of traditional banks or investment platforms as a growing area of interest.
In a case study that illustrates a low level of public familiarity with crowdfunded investments, an individual Mr J registered an interest in investing £5,000 in a local start-up through a crowd funding platform.
Mr J understood he was allowed a cooling-off period and that he would later be notified of a commitment to invest.
When Mr J later saw his account had been debited, he asked the crowdfunding platform to return his money. However, the platform said that the money was already invested in the local start-up, which did not wish to return it.
On investigation by the Financial Ombudsman the platform produced an email it had sent to Mr J informing him when his cooling off period had ended and that once that happened the investor had an agreement with the 'investee' directly.
The Financial Ombudsman found in favour of the crowdfunding platform.
"We decided it was more likely than not that the crowdfunding platform had sent the email in question, giving Mr J clear information about the process of making an investment, including the cooling off period. So – while we appreciated that Mr J was frustrated – we didn’t agree the platform had acted unfairly."
Jason Witcombe, director at Evolve Financial Planning, said he was extremely nervous about the outcomes for such alternative investments.
"Just because something is innovative does not mean it is good," he said. "A lot of the investments we set up for clients are deliberately boring, but when investing is pretty good."
He thought some people would do well and others would get nothing back.
Ones where it is a crowdfunding into a new business, you have got to go into it with a higher risk of losing money, but I do not think people go into that
He said peer to peer lenders were being marketed as an alternative to cash when they were clearly not.
