Pensions Ombudsman 

Ombudsman puts Sipp cases on hold due to court action

Ombudsman puts Sipp cases on hold due to court action

The Pensions Ombudsman (PO) has put about 20 Sipp cases on hold while it awaits the outcome of a case currently going through the courts.

The ombudsman service told FTAdviser it had been processing claims right up to proceedings being filed in the Adams vs Carey Pensions case, which was heard in late March and is currently awaiting judgement.

The case centres on the question of whether a Sipp provider can enter into an execution-only contract with clients.

A separate case, a judicial review involving the Financial Ombudsman Service (Fos) and Sipp provider Berkeley Burke, is to be brought to the courts in October, which deals with a similar issue.

A spokesperson for the ombudsman said: "The Pensions Ombudsman has approximately 20 cases on hold pending the outcome of the Adams vs Carey Pensions court case, as they are closely connected.

"Until proceedings in that matter were filed, we were progressing our Sipp case investigations since it was not clear what was happening about the Berkeley Burke matter and it is a judicial review of a particular decision by the Financial Ombudsman Service, so the outcome would not necessarily provide any assistance with our cases."

However, the Financial Ombudsman Service has told FTAdviser it was not halting cases.

A spokesman for the Financial Ombudsman Service said: "We are progressing complaints relating to Sipps in accordance with our statutory duties."

But the ombudsman service's spokesman said it would not comment further on matters, which are the subject of legal proceedings.

Mis-selling solicitor at APJ Solicitors, Glyn Taylor, questioned whether regulatory bodies should be holding cases as the regulator "has been clear" about what it expects from Sipp firms.

The Financial Conduct Authority (FCA) submitted its views to both the Carey Pensions and Berkeley Burke cases, saying Sipp operators could not shirk regulatory responsibilities towards their clients, regardless of whether there was an execution-only contract in place.

It stated that under the Financial Services and Markets Act 2000 acquiring the assets in a Sipp was a regulated activity, which means the regulatory principle two (conducting business with skill, care and diligence) and six (paying due regard to the interests of customers and treating them fairly) had to apply.

Mr Taylor said: "The court is deciding based on the facts of the case but it’s clear what the FCA expect Sipp operators to do.

"The regulator should have a big say on what they expect Sipps to do to comply with the rules."

Another factor slowing down some cases seems to be uncertainty over which body should be taking them on.

A spokesman for the pensions ombudsman said their service continued to work closely with the Financial Ombudsman Service on cases of mutual interest and delays were purely down to the pending court decision.

But FTAdviser has learnt of a case which has been stuck between the bodies since February.

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