Both Mr Adams and the FCA argued that Carey had breached the FCA rule which requires a regulated firm to act "honestly, fairly and professionally in accordance with the best interests of its client".
The court disagreed, holding that the duty had to be construed in the context of the valid contractual arrangements between the parties which (along with the product literature) had made clear to Mr Adams that he was responsible for his investment decisions and that Carey would act on his instructions.
What are the wider implications of this judgment?
This is a case in which the High Court has upheld a view of Sipp business models shared by Sipp operators themselves.
That is, that a Sipp operator is legally responsible for the pension wrapper and compliance with tax rules but not member investment decisions; and that providers should be able to do "execution-only" business without becoming culpable on a "with the benefit of hindsight basis" for customers who deliberately and knowingly choose high risk speculative investments.
That view has been under sustained attack in recent years by customers who have experienced failed high-risk investments within their Sipps.
With limited or no effective recourse available against the unregulated introducers and the underlying investment providers, customers have increasingly sought to blame the Sipp provider, encouraged by claims management companies and the Financial Ombudsman Service, and with the support of the FCA.
Providers have increasingly been held liable by the Fos to provide compensation for their customers' investment choices when things go wrong. Unlike the courts, the Fos is not required to follow the strict letter of the law when considering complaints within its jurisdiction.
The high watermark of this trend was 2018's controversial Berkeley Burke case in which the courts upheld a Fos decision which had concluded, based on general FCA principles, that Sipp providers should conduct very detailed investigations on high risk "speculative" investments and consider whether they are "appropriate" for a pension scheme.
The ramifications of the Berkeley Burke judgment have probably caused more than one Sipp provider to go out of business, as it has encouraged claims management companies to target the sector.
But the Carey case goes the other way, is almost the polar opposite in tone and approach from Berkeley Burke, and shows complete sympathy for a Sipp provider whose documents and risk warnings made crystal clear that the risks of investing in store pods lay firmly with the client.
Whilst this is a welcome "win" for the Sipp provider in question, it should not necessarily be seen as "resetting" the trend of Sipp provider liability more generally.
