Guest comment: Ten years of risky business

Since 2009, Carey Pensions has been offering unsuitable Sipps to individuals, mishandling their money and often falling short of the necessary standards.

Like many unscrupulous firms, Carey Pensions worked with introducers; third party companies that used cold calling and other underhand techniques to persuade Brits to invest their money in a range of unregulated or risky Sipp schemes.

In the case of Carey Pensions, the unregulated introducers - in this case Commercial Land and Property Brokers (CL&P) - most likely got around these rules because they operated out of Spain.

This firm would offer consumers high risk, unregulated investments through a Carey Pensions Sipp via cold calling techniques. The investments were sold to the customer as a guaranteed way to make easy money for no risk.

In 2012, almost a third (30 per cent) of the firm’s revenue came via business from CL&P brokers, and it has also come to light that Carey’s CEO, Christine Hallet, was aware that Store First, a commonly mis-sold high risk investment, was a product of CL&P, and was also aware that they gained large amounts of commission on any investments.

In 2017, Carey Pensions were in the spotlight again following an investigation by BBC Radio 4’s consumer affairs programme, ‘You and Yours’.

Its investigation revealed that at least a dozen investors had received “long and threatening” letters from the pension provider’s law firm, directing the claimants to withdraw from the FOS complaints process and offering small amounts of compensation, attempting to push them into signing Non-Disclosure Agreements.

In the midst of the many ongoing legal proceedings, Carey Pensions posted financial losses in consecutive years, and in October 2018, the company was sold to STM Group. STM Group is also linked to mis-selling schemes such as Harlequin Properties.

In July 2012, a lorry driver named Mr. Russell Adams invested £50,000 into Store First storage unit pods after he was approached by a third party introducer. As with many of these investments, the funds have depleted over the years and are now deemed virtually worthless.

As part of the deal, Mr. Adams accepted a £4,000 inducement via the introducer. His legal team are arguing that Carey Pensions breached FCA rules that state a firm must always act in a client’s best interest.

They are also arguing that, if Mr. Adams had been given “competent financial advice” it’s highly unlikely he would have invested such a large amount of money in an unregulated Sipp of this kind.

They have also argued that, if Carey Pensions had been doing their job as a trusted financial provider, it would have declined to give any business to this sort of "high-risk and highly speculative investment" in the first place.

Carey Pensions may argue that, as Adams accepted the £4,000 inducement, the client would have proceeded with the investment anyway, without any guidance for financial advice.

APJ Solicitors solicitor, Glyn Taylor, commented: “We predict the outcome of the imminently-expected court ruling will rule in Mr. Adams’ favour and find that Carey Pensions did breach Section 27 of the Financial Service and Markets Act 2000, due to the fact that it accepted a Sipp from an unregulated introducer.

“We are hoping that, when it does arrive, the ruling will provide more clarity into the law, particularly in relation to the Section 27 argument. The ruling in the case of Section 27 will mean that future Sipp cases who have used an unregulated introducer will be bound by the same arguments as seen in the Carey Pensions case.

“Using unregulated third party introducers and not doing appropriate due diligence on the investments touted by these introducers to clients is a huge problem for the pensions industry, which is supposed to be a highly trusted one.

“Additionally, if these introducers are pushing certain products because they are receiving large amounts of commission, this is surely not in the interest of the consumer, who is looking for impartial advice that is in their best interests at all times.”

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