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GREENEST SHADE OF SUCCESS P27


GET IN TOUCH WITH TECH P22


No. 1664 | The Voice of Financial Advisers


Rowanmoor faces surge of Sipp complaints at Fos


by Carmen Reichman


Self-invested personal pension provider Rowanmoor is facing hundreds of complaints at the Financial Ombudsman Service relating to a troubled offshore property asset held by clients in their Sipps. The Fos said it has received


400 complaints related to Sipp due diligence involving Cape Verde-based property scheme The Resort Group. Of these, the ombudsman said the “vast majority” are against Rowanmoor. Due to the volume of similar


cases, the ombudsman is processing a number of sample cases first in the hope it will speed up the process for the remaining claims. The Fos estimates it will take about four months before it can begin to process the bulk of the cases. Chris Bryans (pictured), an


adviser who also runs claims management company Complaints SOS, said he was representing dozens of clients with Rowanmoor pension plans. He said: “What surprises us


with all of these Sipp-related complaints is the sheer volume of them. “While we don’t doubt that


the issues at Rowanmoor pre- date the existing staff and management, who have a good grasp on the regulatory aspects of these plans, we feel that more could and should have been done to support these people.” Rowanmoor declined to comment on the Fos figures but pointed to its “clean record” on claims involving TRG. Mr Bryans claimed many of


these customers were allowed to sign property purchase contracts when they did not even have enough money to buy the property. One of his clients, Wendy Taylor, invested in an apartment at TRG’s


Change of direction Sipp providers have historically been somewhat shielded from complaints about the investments in their pension wrappers, as clients chose to bring their claims against the advisers instead. But as more advisers have


Dunas Beach resort 10 years ago.


Ms Taylor and her husband


were advised to transfer out of their occupational pension schemes by an adviser from CIB Life, which had been introduced to them by TRG and has collapsed since. The adviser helped them set


up a mortgage structure whereby they would use their Sipp as a downpayment for the purchase, but around two years later the lender pulled out as the hotel complex had not yet been built. By that time the couple were contractually obliged to continue with the sale, having put down the deposit months earlier. As a result they swapped their apartment for two fractional shares in a cheaper hotel room costing £95,000. The Financial Services Compensation Scheme currently values fractional shares in TRG at nil for compensation purposes, while it takes independent valuations for whole apartments. In 2018 when the couple


looked into selling the asset, they discovered they did not hold the title deed. Rowanmoor told them they


could obtain the title for a ¤3,452 (£3,084.43) fee,


covering solicitors’ legal fees and local government tax, but warned them TRG had the right to keep their investment should completion not take place. Ms Taylor said she refused to


invest more capital into the investment, having become aware of growing investor concerns around it. The couple have lodged a


claim with the FSCS in respect of bad advice given by defunct CIB Life, but they also took a claim to the Fos that argued that Rowanmoor had failed in its duty of care towards them. Ms Taylor said she did not understand why her Sipp was allowed to “sign a contract to buy an offshore, off-plan property without an independent solicitor, without a mortgage offer in place and without an independent valuation of the hotel apartment”. Mr Bryans said: “The Rowanmoor clients we have dealt with have said they trusted the investment was appropriate for them because this was a regulated pension provider and, as one of the largest Sipp providers in the country, it would not have permitted this investment if it was not OK for its pension plan.”


folded, and FSCS claims proved less financially rewarding than those made by the Fos, pressure has grown on other parties in the supply chain. This was intensified by a number of recent court rulings, which established that Sipp providers in certain cases have a duty to their clients to prevent them from harm, including carrying out due diligence on the underlying investment. One of these claims, involving Carey Pensions, is being contested. The ombudsman’s decisions database does not list any finalised claims against Rowanmoor in association with the TRG investment to date. The Sipp company does


show up on three successful claims against advice business Insight Financial Associates and TRG, as well as six unsuccessful efforts. A Rowanmoor spokesperson


said: “We ceased working with CIB and Insight Financial Associates. Although the FSCS has paid out against advice provided by CIB, this is not the case with Rowanmoor – we continue to have a clean record in this respect.” Mr Bryans concluded:


“What is most disappointing is that so many genuinely good IFAs apparently [complained] to the regulator and it appears no action was taken at the time.


“The same IFAs now have to


meet the higher FSCS costs, driven in part by the losses on these [same] investments.”


Email: carmen.reichman@ft.com


SEND US YOUR COMMENTS: FA.LETTERS@ FT.COM


NOVEMBER 12 2020


NEWS P1-20


COMMENT P22-25


IN DEPTH P27-35


BETTER


BUSINESS P37-38


Regulator ‘dragging its feet’ on PII


Advisers have warned the regulator’s timetable for a solution to the industry’s professional indemnity insurance dilemma will “cause severe hardship” to the sector. The Financial Conduct Authority has also been accused of “dragging its feet” over the increasingly hardened insurance market for advisers, following estimations made by its boss that the problem would take “two or three years” to fix. Alan Smith, chief executive


of financial planning business Capital, said: “Regrettably this is reflective of public-sector mentality. Advisers and their staff, all across the UK, are facing a fundamental challenge to their livelihoods, as well as their ability to support and advise their clients during what is obviously a difficult period.” Mr Smith warned many companies were being “squeezed by the perfect storm” of substantial increases in regulatory fees, PI premiums and the challenges of operating and developing business during the pandemic. Continue to page two.


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