09 NOV 2020

Consumer Reclaim – Our Guide to Being Mis-sold a SIPP Investment

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When looking into investments, you want to make sure that what you’re buying is the real deal. Receiving advice from financial professionals is key to the decision, as you’ll be putting a large portion of your money and hoping you’ll yield some benefits. Unfortunately, many people continue to receive unsuitable recommendations from financial advisers, causing them to enter into risky investments.

Being the victim of mis-sold goods is a complicated and stressful process. There was a promise of enjoying specific results of a product only for the outcome to be the opposite. If you’ve ever been mis-sold a self-invested personal pension (SIPP) investment, here’s what you need to know:


What is a SIPP Pension?

A self-invested personal pension is an option that allows you to put together more varied investments than most regular pensions. Also known as a ‘do-it-yourself’ option, this setup is incredibly helpful to many people because of its flexibility. Individuals have more freedom to enter into different types of investments in various quantities.

However, this is a type of option that requires a thorough understanding. Some financial advisers have recommended individuals to put their money in high-risk investments through SIPPs without adequately explaining the potential risks. As a result, these individuals suffered from a massive financial loss.  


How Does Mis-selling Take Place?

An individual’s financial adviser is typically in charge of selecting SIPP investment funds, as they are responsible for choosing investments that are best aligned to the customer’s financial needs and goals. The adviser must also factor the customer’s risk appetite. Unfortunately, some financial advisers have put customers’ funds into risky investments without adequately notifying them of the involved risks and dangers. 

When this occurs, some customers end up with a mostly emptied pension fund. The money they worked hard to save for their retirement has gone, thereby setting them up for financial difficulties when they finally retire. 


In What Ways Can I Claim Compensation?

If you have been mis-sold a SIPP investment, you must have fulfilled one of the following conditions:

  • Your financial adviser recommended you to change your investments without providing a full and comprehensive explanation and seemed to be in a rush,
  • The value of your SIPP pension had decreased even when your financial adviser promised it would increase,
  • Your financial adviser did not thoroughly apprise you of the factors and situations that could diminish the value of your investment.

Meeting any of these conditions makes you eligible to claim compensation for being mis-sold a SIPP investment.


What Are the Entities Involved in SIPP Investment Losses?

According to the Financial Conduct Authority (FCA), they found that many financial advisers had ‘serious and ongoing failings’ with SIPP investments. Their failures were generally concerned with failing to ensure the safety and soundness of SIPP investments while making sure they were a good match for their clients’ needs.

An adviser that has been penalised by the FCA is Tailormade Independent, which was involved with persuading customers to funnel their existing pensions into many unregulated investments through SIPPs. These include investments in farmland, biofuels, and green oil. The company has since gone into liquidation. As a result of the disciplinary action, three of its directors are now prohibited from taking executive roles in the financial sector.

The FCA further added that Tailormade’s directors failed to conduct the activities with transparency and did not ascertain that the SIPP pension products were compatible with their clients’ needs.



Seeking reliable and comprehensive advice for your investments is the best way to ensure its value will increase. Unfortunately, there’s no sure way of knowing the quality of the advice you’re receiving if you don’t know enough about investments yourself. By being aware of the situations that lead to being mis-sold a SIPP investment, you can protect yourself from the unfortunate consequences. 

Consumer Reclaim helps consumers seek compensation for mis-sold products and services, allowing our customers to get back the money they deserve. We have years of experience in pursuing complaints about mis-sold goods, allowing us to assist thousands of clients confidently. If you think you have been mis-sold a product, be sure to contact us today. 

Consumer Reclaim Ltd is regulated by the Financial Conduct Authority in respect of regulated claims management activities, reference number: 835212. Registration is recorded at: https://register.fca.org.uk. Consumer Reclaim Ltd is registered in England and Wales, Company Registration number: 07223077. Information Commissioner Office number: ZA176000. VAT number: 144 4752 12