The FOS received 321,283 new complaints between 1 April 2016 and 31 March 2017, down from 340,899 the previous year.
Of those, 5,160 related to pensions.
The sharpest increase was for self-invested personal pension schemes (Sipps) and small self-administered schemes (SSAS), which jumped 34% and prompted an industry call for a ‘permitted investment’ list.
By permission only
Mike Morrison, head of platform technical at AJ Bell, said: “While some of the complaints about Sipps will relate to poor admin or delays, the majority are actually about non-standard asset classes; such as hotel rooms in Caribbean holiday resorts, storage pods or car parks.
“These investments have been allowed in a minority of Sipps following advice from a small minority of advisers. Unfortunately, the ‘too good to be true’ nature of the investments turned out to be exactly that.”
Morrison is calling for a permitted investments list, “similar to that which existed before pension simplification in 2006”.
“Only investments on the permitted list would be covered by the Financial Services Compensation Scheme and it would have to be made clear to investors that anything off that list is not covered.
“The list would include regulated investments for which there is some consumer protection in place already and it would not have to be static, with new regulated categories added in future,” Morrison said.
“Such a list would also have a positive knock on effect on the battle against pension scams because it is often unregulated investment schemes that are used to lure people into the scam.”
Advisers caught out
Greater clarity could not only benefit consumers but also advisers.
Research from Sipp provider Momentum Pensions found that around six out of 10 specialist retirement advisers admit to being caught out by unexpected charges from Sipp providers in the past year.
John McCreadie, head of sales (UK) for Momentum Pensions, said: “The Sipps market is growing strongly but the support of advisers is crucial to maintain momentum across the market.
“It is clear that advisers want total transparency over charges from providers so they can make meaningful comparisons and recommendations to clients and it is depressing that so many say they have been caught out by unexpected fees.
“Transfers into Sipps are a major issue particularly given the defined benefit pension focus which is highlighting the need to be clear on charging as well as on investment advice.”
