Unregulated collective investment schemes

Many of the complaints we receive involve a UCIS being held within a self-invested personal pension (SIPP). When people contact us to complain, they tell us:

• their UCIS investments have no value within their pension, or they have not had the expected returns on the investment
• they believe advice they received to transfer their personal pension to a SIPP, so they could invest in a UCIS, was unsuitable
• their SIPP provider didn’t carry out adequate due diligence checks on the proposed UCIS investments
• they wanted to cash in the investment but the SIPP provider wouldn’t allow them to
• they’re still paying SIPP fees when there’s not enough cash in the SIPP, because most of their pension fund is tied up in UCIS investments.

If a complaint doesn’t fall under our jurisdiction, we’ll tell the consumer about other organisations that might be able to help them.

A UCIS is not subject to the same requirements as a Financial Conduct Authority (FCA) regulated CIS. For example, there are no restrictions on the types of assets it contains or how much it can borrow.

This makes it a higher-risk investment and generally unsuitable for retail clients due to its speculative, high-risk nature. For the restrictions on promoting non-mainstream pooled investments, see:

• COBS 4.12 of the FCA handbook for events before 1 February 2023
• COBS 4.12B of the FCA handbook for events after 1 February 2023.

The FCA website also offers guidance on who can invest in a UCIS.

We only look at complaints you've had an opportunity to deal with first. If the consumer is unhappy with your decision, or you don't respond to them within the time limits, they can come to us. 

Each case is different, so what we require will vary, but we’ll look at:

• the facts and evidence from both you and your customer
• the relevant laws, rules and regulations, guidance, standards and codes of practice that were in place when the event happened.

What we consider will also usually include:

• how you established whether one of the relevant exemptions applied to promoting UCIS – if you were the customer’s financial adviser
• how you established the UCIS was appropriate for your SIPP – if you were the customer’s product provider
• whether you have:
  • worked with your customer to find out what’s happened
  • properly investigated whether anything went wrong, and
  • taken steps to put things right where appropriate.

We may ask additional questions, or for specific information.

We follow the FCA’s dispute resolution rules (DISP) and will take into account how you’ve tried to put things right. 

If we uphold your customer's complaint, we'll tell you what you need to do to put things right. We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.

Businesses and consumer advisers can contact our Business Support Hub on 020 7964 1400 for information on how we might look at a particular complaint, or for guidance on our rules and how we work.

We also work with businesses and other organisations to help prevent complaints.