In the current economic climate, with a recession looming and interest rates very low, many individuals will be tempted to place their pensions in irregular investments promising extraordinary returns. Often such investments will be made on the recommendation of unregulated introducers and pursuant to contracts with SIPP operators on execution-only terms. In some cases, those individuals will lose significant sums as the returns sought do not manifest. The extent to which those investors might be able to recover damages from SIPP operators remains, to a large extent, unclear.
In two recent cases, R (Berkeley Burke SIPP Administration LLP) v Financial Ombudsman Service  Bus LR 437 and Adams v Options Sipp UK Ltd (formerly Carey Pensions UK LLP)  EWHC 1229 (Ch), the High Court has considered the obligations of SIPP operators engaged on an “execution-only” basis. The two judgments appear to tend in different directions.
Stephen Kosmin, who successfully acted for the Financial Ombudsman Service in Berkeley Burke, will address:
- The scope of the two judgments.
- The due diligence obligations arising from the FCA’s Principles for Businesses.
- The degree of protection for SIPP operators afforded by their contractual terms.
- The FCA’s response to the two judgments.
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