SIPP pension mis-sold?

magpiecottage

Can you name the idiot's firm?

The reason I ask is I want to see if there is evidence of phoenixing.

Norfolk_Norris

Hi Guys

Does anyone know how far the FSCS go when looking into the financial position of the advisor in a case like this?

Would they look at the LLP company assets only, or does it go beyond that and include the individuals personal assets like houses etc?

Thanks
Norris

magpiecottage

Just to say that the OP has sent me a PM.

In essence, the idiot (or rather idiots as it was a two man firm) have joined a network as Appointed Representatives whilst closing down the business with the liability. This is known as "phoenixing".

There is a warning to networks about this here.

I have suggested an e-mail to the network, citing the two individuals with their personal registration numbers and asking how the network intends to rectify the detriment the idiots have cause him with a cc to the FCA.

There is no guarantee this will work - but it should ruffle a lot of feathers and if it doesn't is likely to result in the idiots looking for a real job (or perhaps both).

Norfolk_Norris

Hi magiepiecottage

Thanks for the PM - I tried to reply but it says your box is full!

I wondered, will the fact that they appear to have phoenixed affect the FSCS's ability to declare the original company 'in default'?

Many thanks
Norris

Norfolk_Norris

Hi Guys

Out of the blue, i get a letter from the FSCS saying they have also found in favor of me, and will be sending compensation shortly.

I've got a few questions, if anyone can help; they are refunding £16,500 - the original pensions transfer was £20,500.

The £5000 difference was placed in a SIPP current account, which the pension admin company take their £500 per year - this I have been told by Hornbuckle Mitchell is untouchable because it is connected to a pensions fund that is currently up in the air due to the fraud investigation.

Q1 - the FSCS say they take over rights to that pension once they have paid me the money; would this mean the SIPP current account would become detached from the pension now?

Q2 - i did ask why I had not 'been put back in the same financial position as i was before the advise took place' - ie, £16,500 back to me, but £5500 still effetively tied up in a current account which is being eroded by £500 per year in fees - they said its something to do with "SIPP rules", but sounded really vague; should they not have taken on the whole lot and just compensated me back to where I was 5 yrs ago?

Q3 - no interest has been added to the comensation despite 5 years passing since the advice took place; the FSCS said this is because the interest calcualtion they use is LIBOR minus 2%, which equals zero! Does this sound right?

The conversation I had with the FSCS about the above was with a really vague person; and input would be much appreciated.

Lastly, I am looking to re-invest the money and was thinking along the Buy To Let route - maybe a £50k flat, with a 25% deposit - any opinions on that?

:-)

atush

?I certainly would complain to their current employers who may not know about this>

q1- it would still be in a sipp, and could be transferred to other pensions you might have now or set up. ASk for the fees to be refunded as well?

q2- the sipp current acct money is still there, so you have been

q3- sounds like it is according to their rules, had the firm still been there, you could have gotten the interest from them. You could try CC judgment against the individuals.

BTL- are you joking here? You have just pulled yourself out of a scam, now you think you are ready to go into a business? Where all income and Capital gains are taxed?

Put the money back into a pension (try a real one this time) and get tax relief or use a S&S isa and invest in collective funds/investment trusts.

kidmugsy

Norfolk_Norris wrote: »

Lastly, I am looking to re-invest the money and was thinking along the Buy To Let route - maybe a £50k flat, with a 25% deposit - any opinions on that?

In your shoes I'd probably be tempted to use all those nice high-interest current accounts that are around at the moment, and - if you are near enough to 55 that the inflexibility of pensions isn't a prob - drip feed some money into pensions.

The tax deal on owner-occupied housing is excellent; less so on BTL. Anyway, BTL is a business - do you have any competitive advantage in that business? Would you be happy to have an illiquid, indivisible, geared investment? Have a look at the crash of the early 90s, as shown here.
http://monevator.monevator.netdna-cdn.com/wp-content/uploads/2011/12/real-house-prices.jpg

Norfolk_Norris

Thanks atush.

I ahave already logged a complaint with Hornbuckle Mitchell about the annual £500 fees for effectively managaing nothing; the pension fund being worth zero since 2010! - updates to follow...

As for BTL, I have had indirect dealings with these in the past and would feel comfortable gettng involved again.

I have become a bit disillusioned with pensions after all this; not so much dodgy advisors, but what they'll be worth in 20 or so years.

My thinking on the BTL scenario is making net monthly income of say £250, after the mortgage, buildings insurance and tax - so over 20 yrs thats £60,000 income - the property would more than likely be worth more than £50,000 in 20 years - if it isn't the asset is still there, and could be rented indefinitely, still providing an income.

Assuming the mortgage would be repaid in 20 years, and using the theory that money doubles in value every 10 years, the rental income would be circa £1000 per month in 2035.

What kind of pension pot would I need to provide me similar in the future?

atush

I agree you should take the complaint forwards, all t he way to ombudsman with HM.

But your BTL idea is a sort of misguided fantasy. You didnt have a pension before, you had a scam. If you had a regular PP or Sipp, and invested it wisely (diversified nit in just one asset like property) in funds, you would see it grow. Even better you would keep adding to it and get tax relief.

Our pensions have soared in recent years while yours was with the scammer.

BTL is an OK investment as part of your portfolio. Problem is, you dont have one large enough to support this idea.

as i said, get an Actual, Real, pension this time. Invested in funds/investment trusts, global trackers etc.

kidmugsy

Norfolk_Norris wrote: »

using the theory that money doubles in value every 10 years

That means you're assuming 7% p.a. inflation. Goodness me, why?