Claims management companies are increasingly targeting pension clients, according to self-invested personal pension provider Curtis Banks, which has seen the number of inquires increase.
Will Self, chief executive at the provider, told FTAdviser the firm had received more enquiries from CMCs in the run up to the deadline for payment protection insurance – set for August 29 – but now, he said, they were increasingly turning their attention to pensions.
Mr Self said cases typically don’t progress further at Curtis Bank as it only works in the intermediary space and many CMCs don’t pursue cases after realising there is a financial adviser or an investment counter party involved.
Signs of increased CMC activity in the pension space already emerged in 2017 when the Financial Ombudsman Service reported soaring complaints about Sipps, believed to have been caused by cold calling by claims management companies.
Claire Trott, chairwoman of the Association of Member-Directed Pension Schemes, said it was "clear that CMCs are now targeting Sipps" but she warned many firms did not appear to always understand what they were claiming for.
She said: "Many are using standard letters and documents, asking for details of advice that has been given to their clients.
"For the majority of Sipp firms, no advice will have been given to the individual, so the things they are asking for is irrelevant."
She added: "We understand that for those with a real complaint, having help from an expert to make the appropriate complaint could be useful to both parties.
"The fear is that many will be claiming just because they have been targeted by these firms either directly from their mailing lists or advertising in the paper or radio.
"It should be remembered that if the claims management firm isn’t registered with the Financial Conduct Authority or the Law society, then the Sipp firm doesn’t have to respond to the claims management firm, although they do need to deal with the client directly."
The FCA, which will take over the regulation of CMCs in April, will require these firms to increase the amount of information they disclose to consumers.
For example they will be required to clarify whether their fee is based on the gross or net amount of the compensation award and they must ask the customer if they know of other methods to pursue their claim, such as legal expense cover.
The Professional Financial Claims Association confirmed this trend.
A spokesperson at PFCA said: "There has been a great deal of awareness created over recent months relating to mis-sold Sipps. This has attracted the attention of both financial CMCs and solicitors. In particular, publicity about the Berkeley Burke judicial review in the High Court against the Fos.
"Without doubt, both the legal profession and CMCs have seen this as an opportunity for a new area of financial claim, however, few will succeed as the complexity, time and firms costs in managing such claims is underestimated and will result in disappointment for consumers who instruct firms with a lack of expertise."
maria.espadinha@ft.com
