Advertisement

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.

Advertisement - Article continues below

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.

Advertisement
Advertisement

Recommended

Companies cut back on their pensions bills
Personal finance

Companies cut back on their pensions bills

Britvic is the latest firm hoping a cheaper inflation index will cut pension costs. David Prosser reports.
28 Aug 2019
This landmark pension case could mean big payouts
Pensions

This landmark pension case could mean big payouts

Defined-benefit members in bankrupt firms’ pension schemes could be due a payout after a landmark High Court judgment.
10 Jul 2020
Bank of England sceptical about pension superfunds
Pensions

Bank of England sceptical about pension superfunds

Plans for “pension superfunds”, cleared by industry regulators in recent weeks, could pose a threat to financial stability.
10 Jul 2020
How the pandemic has affected your pension scheme
Pensions

How the pandemic has affected your pension scheme

It’s time to review the effect of Covid-19 on your retirement savings and take any necessary action.
30 Jun 2020

Most Popular

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?
UK Economy

Can Rishi Sunak save the economy with stamp duty cuts and half-price meal deals?

John Stepek runs his eye over the chancellor's £30bn stimulus package and asks if it's enough to get the economy back on its feet after months of lock…
9 Jul 2020
An economics lesson from my barber
Inflation

An economics lesson from my barber

On reopening his shop after lockdown, Dominic Frisby’s barber doubled his prices. It’s all part of the post-Covid inflation process – and we’re going …
8 Jul 2020
What gold, bonds and tech stocks have in common
Stockmarkets

What gold, bonds and tech stocks have in common

"Risk off" or "safe haven" assets such as gold and government bonds have been doing well lately. But so have riskier tech stocks. That seems to defy c…
10 Jul 2020