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Single IFA faces FCA restrictions after no less than 14 upheld Ombudsman complaints regarding high-risk investments into SIPPs

Kingswood Financial Advisors, a Mid Glamorgan based financial advice firm has had restrictions imposed by the Financial Conduct Authority that mean it can no longer transfer people’s pensions into SIPPs with Non-Standard Investments.

The FCA notes say that the firm must not “carry out any regulated activities in relation pension switches and/or pension transfers to any self-invested personal pensions (SIPPS) […] except where the member’s funds are to be invested wholly in standard investments.”

Kingswood Financial Advisors and the FOS

Between January 2015 and November 2016, Kingswood Financial Advisers had a total of 14 complaints upheld against it by the Financial Ombudsman Service regarding transfers into SIPPs.

The transfers, which were deemed unsuitable for the clients by the FOS, all involved investing into Harlequin Properties – a Caribbean property fund that aimed to build luxury resorts in various locations.

The scheme itself has experienced problems, with a section of the business (SVG) entering insolvency proceedings in late 2016, so far leaving many investors out of pocket.

Why are high-risk and unregulated investments a problem?

Assuming you are not a High Net-Worth Individual (earning over £100,000 per year or with £250k of investable assets) or a Sophisticated Investor, unregulated investments like Overseas Property can pose a serious risk to your retirement fund if you place your money into them through a SIPP.

It is the job of financial advisers to assess your circumstances to make sure you are suitable to run the risk of high-risk investments such as Harlequin through a SIPP, but sometimes, the advice they provide is negligent.

Mrs W and Kingswood Financial Advisors

Mrs W was one such case upheld by the FOS.

“Mrs W has complained about advice from Kingswood Financial Advisors in 2010 to transfer her pension to a Self-Invested Personal Pension (“SIPP”). She says the adviser was negligent as he didn’t think about whether the planned Harlequin investment was suitable.”

Although Mrs W’s attitude to risk was recorded by Kingswood as “I accept the risk of a small loss to my money”, Kingswood transferred over £100,000 into a SIPP to be invested in high-risk funds for Harlequin Properties.

“The investment in Harlequin Property exposed Mrs W’s pension funds to significant risk […] I think that Kingswood should have advised Mrs W against transferring into the SIPP; and also advised her not to invest in Harlequin”, the FOS said, before going to say that fair compensation “exceeds £150,000”.


Spencer Churchill Claims Advice specialises in mis-sold SIPPs, mis-sold pensions and investments, and has claimed back £millions on behalf of our clients

Alex Waters
18 January 2017
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