Options SIPP UK LLP is pleased to announce the outcome of the judgment in the long-awaited Adams v Carey case, which has been found wholly in favour of Carey Pensions UK LLP (“Carey”), with Mr. Adams’ claims against Carey being dismissed on all grounds.
The judgment was handed down this morning and relates to a claim by Mr. Adams against Carey Pensions UK LLP for loss of value in an investment which was held within a Self-Invested Pension Plan (SIPP). The case was heard in March 2018.
The case was based on the fact that Mr. Adams was introduced by an unregulated introducer, and that Mr. Adams transferred an existing pension fund into a SIPP administered by Carey, and instructed that his SIPP purchase a number of rental units from Store First. Carey is a non-advisory pensions administrator and carried out the transaction on an execution-only basis as instructed. Mr. Adams’ investment in Store First did not perform as he had expected, which resulted in Mr. Adams bringing a claim against Carey seeking damages.
A concise summary of the judgment can be found at https://www.eversheds-sutherland.com/global/en/what/articles/index.page?ArticleID=en/Financial-services-and-dispute-investigation/Clarity_for_SIPP_providers, who acted as the lawyers for Carey.
Christine Hallett, Managing Director of Carey (now rebranded as Options “for your tomorrow”) said:Christine Hallett, Managing Director of Carey
“We acknowledge this isn’t the outcome the client was looking for, we do have sympathy for his situation and the fact that as a result of his decisions the investments he chose and instructed us to invest in have lost value. That said, we are pleased that the judgment has now been delivered and that the judge has found in our favour on all counts.
It has been a long time coming and whilst we were confident of our position, the lengthy, comprehensive and detailed judgment recognises within it our approach to implementing strong contractual agreements and documentation, together with robust systems, controls, and processes within the business. It was also clear that as a SIPP provider we are expected to carry out execution-only business based on decisions made by our clients.
It is a judgment that has been long awaited by the SIPP industry and consumers alike and gives clarity to what is expected of a SIPP provider under English law and the FCA Conduct of Business Principles when acting upon the instructions of a client. In addition, it has given a much better understanding of the legal relationship between an introducer and the service provider which will provide valuable guidance for both consumers and industry professionals.
We now look forward to continuing to build our UK businesses with our new name Options “for your tomorrow”, new brand positioning and product portfolio along with maintaining our high service levels for all our clients.”
Alan Kentish, Chief Executive of STM Group Plc, added:Alan Kentish, Chief Executive of STM Group Plc
“The judgment is a very welcome and clear precedent for the whole of the UK financial services sector given the increased litigation and use of the Financial Ombudsman to determine complaints. This judgment gives a solid legal footing for these to now be considered in the context of this ruling.
The potential implications for any financial institution carrying out execution only business to have become responsible for their client’s decisions would be, in my opinion, wholly inequitable and inappropriate. I am sure many financial service providers and institutions, as well as their respective trade associations, would wholeheartedly agree and can now look to the future with greater confidence post this ruling.
STM is keen to put this case behind it and ensure its UK business, Options for your tomorrow, realises its full potential.”
Details of the court decision: