In contrast to a similar case referred to the FOS involving the same firm, the Pension Ombudsman (PO) has found in favour of Berkeley Burke in a case where the complainant claimed the firm had failed to carry out sufficient due diligence in respect of his investments into Green Oil Plantations and Harlequin Property.
In contrast to a similar case referred to the FOS involving the same firm, the Pension Ombudsman (PO) has found in favour of Berkeley Burke in a case where the complainant claimed the firm had failed to carry out sufficient due diligence in respect of his investments into Green Oil Plantations and Harlequin Property. The PO held that the complaint should not be upheld, because it was not the firm’s responsibility to carry out the level of due diligence suggested by the complainant, given that the scheme member had confirmed in writing that he had not received advice from the provider and that he was warned to take professional advice. The PO further held that the Trustee Act 2000 was disapplied in relation to investments as the contractual arrangements made clear the member would select these himself.
A very similar case referred to the FOS, also involving Berkeley Burke, was upheld in favour of the client, principally on the basis of guidance and ‘best practice’ published by the FSA in 2009 following a thematic review. This decision was subsequently threatened with judicial review and the FOS is reconsidering the case. A final decision on this is taking considerable time and perhaps reflects the importance and ramifications for clients and firms alike.
Comment – Any firms arranging investments of higher risk and complex products into SIPPs should take note of this decision and also remain vigilant for the final outcome of the FOS equivalent, the latter likely to have a more direct impact.
This is an extract from Change – the regulatory magazine, a CISI members’ benefit. The magazine is written and edited by Christopher Bond, Chartered MCSI, senior adviser to the CISI. This quarterly magazine covers the universe of financial regulation for retail and wholesale/capital markets firms, and for banks.