Growing numbers of firms are being fined by the FCA, due to the poor investment advice they offered their clients in the past.
The latest company to hit the news are LJ Financial Planning in Warrington. The financial watchdog found that they’d mis-sold several SIPPs from March 2010 to December 2012, and as a result, they’ve been made to pay compensation.
Here’s more information about what happened, and what action you should take if you’ve been mis-sold to.
LJ Financial Planning – mis-selling pensions
According to the FCA’s findings, LJ Financial Planning had offered advice to 114 clients, recommending that they transfer their existing pension into a SIPP. The amount invested by these people was over £6million in total.
However, the SIPPS were found to be high risk and illiquid, and their clients lost money as a result. Additionally, the esoteric nature of the pension products meant that few people would have been able to understand exactly what they were investing in.
The FCA’s verdict was that LJ Financial Planning had “failed to take reasonable care to ensure the suitability of its advice for these customers.”
Mark Steward, executive director of enforcement and market oversight, added that “these failings were especially serious because LJFP facilitated the transfer of these investors’ pensions into high-risk investments without assessing whether the investments were suitable for investors.”
It’s a particularly serious case, because many of the SIPPs are now essentially worthless, leaving clients without pension funds to rely on during their retirement.
Conflicts of interest
The financial watchdog also found that the company had failed to manage potential conflicts of interest between its practices, and its clients.
LJ Financial Planning had recommended a particular firm as a wrap platform – Amber Financial Investments. This enabled them to invest via Tatton Investment Management (a discretionary fund manager); however, LJFP had shareholdings in both these companies.
Compensating clients over mis-sold SIPPs
The firm has now been asked to provide clients with compensation. To date, they’ve paid out over £2.6million to 41 clients, and may have to pay more in the future. It’s welcome news for their affected customers, and goes some way to covering losses incurred through their problematic pension products.
What to do if you’ve been mis-sold a pension
If you invested through LJ Financial Planning (or any other financial firm), it’s important to review your investment, to ensure you haven’t been mis-sold to. For example:
- Did they assess your attitude to risk?
- Did they ask about your plans for your retirement?
- Did the SIPP match your requirements?
- Did they offer you a full range of pension products?
- Did they highlight the fact that sticking with your existing pension might be the best option?
- Did you feel pressurised into transferring your pension?
If any of the above apply, you may have been mis-sold a SIPP and could be in a strong position to make a claim. To find out more, get in touch with the Goodwin Barrett team today on 0808 163 1659 today or email firstname.lastname@example.org.