Not upheld: Investment mis-selling complaint against Morgan Lloyd SIPP Services Limited

Decision detail

Summary

Mr T transferred his defined benefit pension to a SIPP in 2010 to fund the purchase of his company's intellectual property, which was intended to provide working capital for Company T. The IP investment was made via a SIPP with Provider CT and later transferred in specie to ML's SIPP in December 2011. When Company T dissolved in May 2012, the IP investment became worthless. Mr T complained to ML in 2021 alleging it failed to conduct due diligence and should not have accepted the unsuitable investment. The ombudsman found that although ML had obligations to conduct due diligence and could refuse unsuitable investments, Mr T's loss occurred before ML's involvement and would have been suffered regardless of ML's actions. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman acknowledged that ML, as a non-advisory SIPP operator, had regulatory obligations under the Principles and good industry practice to conduct due diligence on investments and could reasonably refuse unsuitable investments without giving advice. However, the critical factual issue was that Mr T's IP investment was made before ML's involvement via a previous SIPP provider and transferred to ML on an in specie basis. Therefore, even if ML should have rejected the 2011 application, Mr T would have already suffered the loss through the previous provider, making any action by ML immaterial to his position.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website