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Troubled SIPP Provider Falls into Administration After Complaints
It has been announced that another troubled SIPP provider is going into administration after a raft of complaints and financial problems had already affected a lot of investors, who are now left with grave concerns over their pension and searching for answers about what happens next.
What happened?
It was reported by the SIPP provider that there were a huge number of complaints regarding high-risk investments within its pensions, leading to large financial liabilities. This huge influx of claims and an inability to renew its professional indemnity insurance had put pressure on the company. Several of the upheld complaints by the Financial Ombudsman Service meant the provider had to pay compensation, which stretched the already strained financial stability.
Key Issues
The main issue was high-risk investments included in the SIPPs. Many investors weren't even aware of the risks involved, hence they suffered huge financial losses on account of the same. The complaints against this to the FOS highlighted these issues, and some of these claims were upheld, requiring compensation to be compensated to the investors concerned by the SIPP provider.
Impact on Investors
The immediate concern for investors would now be the security of their pensions with the provider going into administration. If a SIPP provider goes into administration, it means the company doesn't have the ability to continue normal operations and needs reorganise of its finances under the management of administrators. This process could be long and may block or give uncertainty to investors.
What Should Investors Do?
Any investors with the affected SIPP provider should keep themselves updated as far as information on the administration process is concerned. Here are the ways you may take action accordingly:
1. Contact the Administrator: You can make contact with the appointed administrators so you can understand the status of your pension and any actions that you need to take
2. Monitoring Communications: Be on the lookout for any communication from the administrator or the SIPP provider with regard to next steps.
3. Seek Financial Advice: You can contact a financial adviser to explain the options available for you and ensure that your investments are as safe as possible.
4.Be Informed: Keep checking the websites of the Financial Ombudsman Service and the Financial Conduct Authority in case any further announcements or guidance are issued.
Next Steps
In my experience, the management by a SIPP provider reflects the need to understand your pension investments and the associated risks. While SIPPs can give flexibility and overall control over the investment of your pension, they also carry great liabilities and potential risks. Ensuring that one is well—advised and seeking professional advice will help minimise these risks. If you think you may have been miss advised, please fill out our easy step by step form - Click Here.
