The FCA may be refocusing their attention on certain financial advisers
- FCA to look into advisers recommending high-risk investments
- What is a UCIS?
- Why does it matter?
The Financial Conduct Authority has been looking at a consultation about reforming the FSCS (the fund that pays compensation for people who have received bad financial advice from regulated advisers, amongst other things), and it appears to be concentrating more on the sale of UCIS (Unregulated collective investment schemes).
What is a UCIS?
A UCIS could be any investment scheme that takes money from multiple people that sits outside of FCA regulation. Because of this distinction, the funds are considered to be high-risk, and therefore only suitable for High Net-Worth Individuals and Sophisticated Investors. The problem is when advisers recommend them to people who can’t afford this risk.
When claims are made for the bad advice, some companies can’t afford to pay it, so the FSCS steps in to pay.
Why Does it Matter?
Many in the industry feel we are experiencing a pension mis-selling scandal, with the idea of a UCIS-stuffed SIPP being marketed by unregulated introducers and advised on by IFAs happy to make a quick buck.
But this practice hurts pension savers, who are not always able to recover all of their losses, and the reputation of the industry – hence the FCA wading in.
The team at Get Claims Advice focus on the mis-selling of high-risk investments through SIPPs, and can often identify your eligibility for claim over the course of a free initial assessment.