The Financial Ombudsman Service upheld the complaint against Greystone Financial Services Limited about the investment made through a SIPP
As detailed in FOS decision DRN1107272, the Rock City Fund which had purchased large office space in a business park in Glasgow using significant amounts of borrowing and investor capital, got into trouble in 2011 before becoming valued at zero in 2013.
Considered a UCIS investment – an Unregulated Collective Investment Scheme – only a small amount of pension money should have been invested on behalf of Mr P by Greystone Financial Services Limited. Instead, Mr P complained that £50,000 of his pension money through a SIPP was invested into the high-risk scheme, back in 2006.
The Ombudsman said “The firm [Greystone] should have in my opinion highlighted the risk of the proposed property purchase. It was a single site with a large sitting tenant. There was no thought given by the firm to the risks to the fund should the major tenant decided to move out of the office block. This is what unfortunately happened.”
Ruined retirement dreams
Because of the amount of money lost through the investment, which the FOS believed Mr P would NOT have made in the first place if he had been properly informed of the risks, the FOS decision was to ask Greystone to “compensate Mr P fairly”.
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