Following the announcement that investment platform Novia Financial has set aside millions to cover compensation claims, specialist financial services lawyers are urging anyone who has investments with the platform to act now.
The potential compensation claims relate specifically to investments likely held within Self Invested Personal Pensions (SIPPS) which Novia provides to financial advisors and their clients. Bath-headquartered Novia has set aside £11.7 million for expected claims. Now, experts at national law firm Clarke Willmott LLP have advised clients of Novia with investments in a SIPP to seek legal guidance immediately as there are strict time limits within which compensation for any investment losses can be claimed.
The announcement followed a letter issued by the FCA to SIPP operators identifying heightened concerns including: ‘pension scams and fraud, as well as consumers being allowed to make investments which should not be accepted in their SIPP, including non-standard assets which fail or become illiquid and lose all or most value.’ The investments identified by Novia may be “non-standard”, high risk investments, potentially unsuitable for the individuals advised to invest.
Laura Robinson (pic), partner in the financial services litigation team at Clarke Willmott, said: “Whilst the suitability of the investments is a responsibility that lies with the financial adviser, SIPP operators do have obligations to act with due skill, care and diligence and, also, to pay due regard to the interests of their customers, whom they must treat fairly.
“Since July 2023, SIPP operators have also had to comply with the new Consumer Duty, which requires them to act to deliver good outcomes for retail customers and avoid causing foreseeable harm to them. Novia has announced that it has set aside £11.7 million to cover compensation over these ‘legacy investments’, but time could be running out for investors to claim it.”
The FCA’s letter reminded SIPP operators of their enhanced obligations under the Consumer Duty, stating ‘if you identify issues through performing initial or ongoing due diligence, you need to consider how to meet your obligations to consumers (under Principle 7 and, from July 2023, Principle 12) which may include contacting clients to inform them of any issues identified. This is so consumers can take appropriate action (such as reviewing their pension arrangements, seeking guidance, appointing a new adviser, or making a complaint).’
Laura, who is well known in financial services litigation for her work in recovering millions for steelworkers affected by the British Steel pensions scandal, continued: “Novia has reportedly identified that the investments in question were made before 2017.
“Very broadly speaking, investors will have 6 years from the investment being made to make a claim or complaint with a view to recovering any losses. That 6-year period is running out fast.
“All is not lost, however, as there can be more time permitted where investors have only recently become aware that their money was invested in unsuitable products. Each case will turn on its own facts, so it’s important to act quickly following the announcement.”