Self-invested personal pension provider Rowanmoor is facing hundreds of complaints at the Financial Ombudsman Service relating to a troubled offshore property asset held by clients in their Sipps.
The Fos said it has received 400 complaints related to Sipp due diligence involving Cape Verde-based property scheme The Resort Group. Of these, the ombudsman said, the "vast majority" are against Rowanmoor.
Due to the volume of similar cases, the ombudsman is processing a number of sample cases first in the hope it will speed up the process for the remaining claims. The Fos estimates it will take about four months before it can begin to process the bulk of the cases.
Chris Bryans, an adviser who also runs claims management company Complaints SOS, said he was representing dozens of customers with Rowanmoor pension plans.
He said: "What surprises us with all of these Sipp-related complaints is the sheer volume of them.
"While we don’t doubt that the issues at Rowanmoor pre-date the existing staff and management, who have a good grasp on the regulatory aspects of these plans, we feel that more could and should have been done to support these customers."
Rowanmoor declined to comment on the figures at the Fos, but pointed to its "clean record" on claims involving TRG.
Mr Bryans claimed many of these customers were allowed to sign property purchase contracts when they did not even have enough money to buy the property. One of his clients, Wendy Taylor, invested in an apartment at TRG's Dunas Beach resort 10 years ago.
Ms Taylor and her husband were advised to transfer out of their occupational pension schemes by an adviser from CIB Life, which had been introduced to them by TRG and has collapsed since.
The adviser helped them set up a mortgage structure whereby they would use their Sipp as a downpayment for the purchase, but around two years later the lender pulled out as the hotel complex had not yet been built.
By that time the couple were contractually obliged to continue with the sale, having put down the deposit months earlier. As a result they swapped their apartment for two fractional shares in a cheaper hotel room costing £95,000.
The Financial Services Compensation Scheme currently values fractional shares in TRG at nil for compensation purposes, while it takes independent valuations for whole apartments.
In 2018 when the couple looked into selling the asset, they discovered they did not hold the title deed.
Rowanmoor told them they could obtain the title for a €3,452 (£3,084.43) fee, covering solicitors' legal fees and local government tax, but warned them TRG had the right to keep their investment should completion not take place.
Ms Taylor said she refused to invest more capital into the investment, having become aware of growing investor concerns around it.
The couple have lodged a claim with the FSCS in respect of bad advice given by defunct CIB Life, but they also took a claim to the Fos that argued that Rowanmoor had failed in its duty of care towards them.