Not upheld: Investment mis-selling complaint against Mattioli Woods Limited

Decision detail

Summary

Mr A transferred pension funds into a Mattioli Woods SIPP and invested £76,500 (90% of his transferred funds) in unquoted shares in Fund V, a property development fund focused on central London residential properties. He was introduced to the investment through a work colleague and Mr M of Business V, an unregulated introducer. Mr A signed multiple documents confirming he was a high net-worth investor and understood the risks, though he did not seek independent financial advice. The investment ultimately failed due to external market factors (Stamp Duty changes, Brexit, COVID-19 pandemic) and Mr A lost his entire investment. He complained that Mattioli Woods failed to conduct adequate due diligence on the investment and introducer. The ombudsman found that while Mattioli Woods could have conducted more extensive checks, there was no evidence such checks would have revealed information warranting rejection of the investment, as it was legitimate, compliant with pension rules, and showed no signs of impairment at the time.

The Ombudsman's reasoning

The ombudsman applied the Principles for Businesses (particularly Principles 2, 3, and 6) and FCA guidance to determine Mattioli Woods' obligations as a non-advisory SIPP operator. While acknowledging that Mattioli Woods could have conducted more extensive due diligence on Business V as an introducer and on Fund V as an investment, the ombudsman found no evidence that such checks would have revealed information that should have led to rejection of the investment. The investment was legitimate (not fraudulent), the fund structure complied with HMRC requirements, and there was no public information suggesting impairment at the time. The ombudsman noted that Mr A was clearly informed he should seek independent advice, was told of the risks, and confirmed his eligibility as a high net-worth investor. The fact that the investment was high-risk and ultimately failed due to external market factors (Stamp Duty changes, Brexit, COVID-19) did not mean Mattioli Woods should have refused it. The ombudsman distinguished between a failure to conduct due diligence and a failure that would have revealed discoverable issues warranting rejection.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website