The Pension Ombudsman has rejected a complaint against a SSAS provider in relation to investments in carbon credit investments made on the instigation of an unauthorised introducer. In contrast to FOS decisions we have seen, the Pension Ombudsman appeared to put the onus and risk on the consumer for engaging with an unauthorised introducer.

Pension (, a provider of small self-administered schemes (SSAS), was contacted by an unregulated introducer to set up a SSAS for a Mr D. The unregulated introducer told that Mr D was interested in making a loan to his existing company using monies from a pension pot he had with Skandia. sent the documents to set up the SSAS to the unregulated adviser. The documents set out, amongst other things, that was not a signatory to any investments or bank accounts and did not recommend any investment products or give investment advice.

In April 2012 received the completed forms to establish the SSAS, discussed these with Mr D and £228,367 was subsequently transferred from Skandia into the SSAS' bank account.

In June 2012, wrote to Mr D's accountant requesting information regarding the financial strength of the employer company; the proposed recipient of the loan from the SSAS. The unauthorised introducer responded and said the employer was not seeking a pension scheme loan at the time. Mr D went on to make investments in carbon credits that proved to be worthless. Mr D said that he had not signed the forms to make the investments and that his signature had been forged by the unauthorised introducer.

Mr D complained to the Pension Ombudsman. He argued that to allow the SSAS to operate on the basis of one signature should have been raised with him as a risk. Mr D also argued that he should have been told that the unauthorised introducer was not FCA "accredited" and he also referred to COBS rules 2.1.1 (where a firm must act honestly, fairly and professionally in accordance with the best interests of its client) and 9.2.1 (where a firm must ensure that a personal recommendation, or a decision to trade, is suitable for its client) governing the investments made from monies held within the SSAS.

The Ombudsman found that:

  • As the unauthorised introducer appeared to be acting on behalf of Mr D, it was for Mr D to carry out his own due diligence on his "adviser".

  • The COBS rules were not relevant in this case. This was because was not aware of the investment until after the investment had been made as they were not a signatory on the account.

The facts of this case are arguably quite extreme. However, the finding of the Pension Ombudsman that it was for Mr D to make his own enquiries when it came to the unauthorised introducer is an interesting one. The Pension Ombudsman arguably appears to be putting the risk of involving an unauthorised introducer on the consumer rather than the SSAS provider.

This finding appears to stand in stark contrast to FOS adjudicator and ombudsman decisions we have seen involving SIPP providers and unauthorised introducers where the FOS has readily found against SIPP providers involved in esoteric investments in circumstances where an unauthorised introducer is involved. In our experience the FOS particularly dislikes cases such as this where the investment is in an esoteric investment and forms 100% of the consumer's pension funds.

SSAS complaints fall to the Pension Ombudsman as SSASs are not regulated by the FCA. This is despite the fact that the FCA has apparently requested information about SSASs from entities it regulates (for example, where a firm is both a SIPP and SSAS provider). The FCA and Pension Regulator are both concerned that SSASs are a weaker target for frauds as appears to have taken place in Mr D's case.

As SSAS complaints will continue to fall to the Pension Ombudsman there also remains the real chance of differing approaches being taken between the Pension Ombudsman and FOS when it comes to liability issues for investments made from SSASs and other pension products and the involvement of unregulated introducers. This is an area we continue to watch closely.