Liberty SIPP went into administration on 27 April 2020 and is the latest mis-sold pension financial provider to hit the headlines due in part to high-risk investments in unregulated markets. If you’re worried about your Self Invested Personal Pension (SIPP) with Liberty SIPP and want to know more, this Next Gen Solicitors briefing provides all required information.

What Is a SIPP?

In many ways, a SIPP could be classed as a DIY pension, as it enables anyone saving towards a pension to choose their own retirement investments. They are a perfect solution for people with several small pensions, as it’s possible to transfer all of these into one SIPP “wrapper”. There are two types of SIPP. These are:

  • Full SIPPs, which are only suited to larger pensions investments and more sophisticated investors seeking to put funds in discrete investing solutions, such as commercial properties. These SIPPs tend to accrue higher management charges, and providers include Suffolk Life and Rowanmoor.
  • Lite or DIY SIPPS, which do provide a much larger variety of investments, and are operated by a variety of what’s termed fund supermarkets. What is often classed as the “get out clause” by SIPP providers of this nature is that they are “execution-only” which means the provider does not offer up any sort of investment advice. Liberty SIPP falls into this category and has attempted to argue with the Financial Ombudsman Service (FoS) that its execution-only status meant it was not liable for any investor losses. This argument has proved to be an invalid legal defence, and the FoS has confirmed that Liberty SIPP does have some responsibility for client investor losses.

Who Are Liberty SIPP?

Liberty SIPP launched in 2007, and its introduction of the Liberty Option SIPP in 2013 was extremely popular with pensions advisers and savers. This was down to the low annual management fees and zero fee setup costs for the SIPP. However, mis-sold SIPP allegations dogged Liberty from 2011 onwards, resulting in the 2018 sale of its total assets to EBS Pensions Ltd, part of the Embark Group. This means that Liberty SIPP did not hold or administer any client assets at the time of the insolvency.

The Financial Ombudsman Service upheld a number of cases against Liberty SIPP, all of which were in regard to high risk, and non-standard investments. Many of these cases related to the unregulated introducer Avacade, and the wide range of Avacade-guided investments clients made into high-risk schemes. These included:

  • Gas Verdant
  • InvestUS
  • Ethical Forestry
  • Sustainable Agro

Most of the Avacade claims have been upheld by the FoS, which has stated there is: “a high chance that a lot, if not all, of the business introduced by Avacade, would contain a high risk of significant consumer detriment.”

The FoS rulings were twofold, as they related to the fact that Liberty SIPP accepted introductions from an unregulated provider, such as Avacade, and also enabling the funds introduced to be invested in these high risk, unregulated and unsuitable schemes. The argument that Liberty SIPP was merely a facilitator and operated on an “execution only” basis was dismissed by the FoS, as the company was deemed to have failed in its requirement to apply due diligence in all financial aspects of the business.

Liberty SIPP was subsequently advised to enter administration as the high numbers of successful claims made against it meant it was insolvent. The administration order provides some levels of protection for consumers under the terms of the Financial Services Compensation Scheme.

If you are an investor with Liberty SIPP, you will shortly receive a letter from the administrators, Leonard Curtis. This letter will provide advice on what further action you need to take and what this insolvency means for you. If you don’t already have a claim in place, you will need to apply via the Financial Services Compensation Scheme (FSCS).

How Can I Claim Against Liberty Sipp?

You can avoid all the worries of claiming against Liberty SIPP for your mis-sold SIPP when you instruct the experts here at Next Gen Solicitors. All our cases against Liberty are dealt with on a no-win, no fee basis, so you don’t have to part with a penny of your hard-earned cash. Get in touch today to find out more!

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