A Sipp provider can’t do your research for you

Execution-only platforms have no responsibility to protect you from your own bad investment decisions, a court has ruled.

Pension savers who lose money after making unregulated investments without taking financial advice are unlikely to be able to claim redress from their pension providers following a recent court ruling. 

The judgment is a blow to the notion that providers should protect savers from high-risk pension investments in all circumstances.

Lawyers acting for a saver with a self-invested personal pension (Sipp) run by Options Pensions had hoped the company would be forced to pay compensation after it followed his instructions to invest in a high-risk, unregulated property scheme. The scheme subsequently resulted in big losses for the saver. However, Options Pensions argued that like many providers of Sipps, it operated on an execution-only basis and had made it clear that it did not offer investment advice. It said it had therefore simply carried out its customer’s instructions and was not under any obligation to carry out due diligence on the investment, or to warn the saver against making it.

The ruling has been keenly awaited by the pensions industry. It is in line with the stance taken by the Financial Ombudsman Service, which has also refused to order pension providers to pay compensation in similar cases.

Recommended

What will happen to the price of gold in 2022?
Gold

What will happen to the price of gold in 2022?

Gold is traditionally the go-to asset during inflation. But with inflation at 30-year highs, it has gone nowhere. Dominic Frisby investigates why, and…
20 Jan 2022
UK inflation is at a 30-year high and it hasn’t peaked yet
Inflation

UK inflation is at a 30-year high and it hasn’t peaked yet

UK inflation has hit 5.4% - its highest in 30 years. And it could be heading higher. John Stepek explains what it means for you and your money.
19 Jan 2022
Index fund
Funds

Index fund

Index funds (also known as passive funds or "trackers") aim to track the performance of a particular index, such as the FTSE 100 or S&P 500.
18 Jan 2022
Model Y: Tesla has nailed it once again
Cars

Model Y: Tesla has nailed it once again

The electric carmaker’s new SUV crossover, the Model Y, sets the benchmark in the sector.
18 Jan 2022

Most Popular

US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Interest rates might rise faster than expected – what does that mean for your money?
Global Economy

Interest rates might rise faster than expected – what does that mean for your money?

The idea that the US Federal Reserve could raise interest rates much earlier than anticipated has upset the markets. John Stepek explains why, and wha…
6 Jan 2022
Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022