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Sipps sharks circle

24th October 2005 | back to article listings BACK    print this article PRINT

As sure as the seasons turn and the sun rises, you can be certain that wherever money changes hands in this world there will be someone out to make a fast and illicit buck, and never more so than when complex and opaque rules make the inexperienced easy prey.

This is the warning being issued by property investment Sipps advisers and pensions planners, who report an alarming rise in the number of unsolicited emails offering "guaranteed Sipps compliant" property across the world.

"We have had some emails from companies with odd sounding names saying they are specialists in a certain area and wanting to offer our clients the benefits of their property services in Bulgaria or wherever," David Baker, director of Sipps planner James Hay told the Financial Times.

"If they are UK-based we try to meet them. But if not it is difficult to know if they are responsible or rogues. We can't investigate them." A further source of concern, says Mr Baker, is a recent rise in the number of emails claiming to have discovered loopholes in overseas property investment laws making transactions simpler and cheaper.

"We have no way of knowing whether this is true so how is the client going to know?" says Baker. Even if an offer is not fraudulent, with the lack of published guidelines and a public still adjusting to the new rules, many could be open to dodgy practices, says Assetz director Stuart Law.

"There is the first hint that overseas developers are marketing their developments this way. My concern is that they will take advantage of confusion over Sipp rules to charge more money for the property, to cover for the fact that the buyer is getting a tax break on the property," he said.

This could be a particular concern, as Sipps are not currently covered by the UK Financial Services Authority (FSA) rules and regulations, meaning that buyers who fall victim to mis-selling have far less recourse to arbitration and compensation.

The advice for now remains to stay with larger and more reputable firms and take anonymous get rich quick schemes with a healthy dose of salt. While the Assetz Sipp remains uncovered by the FSA, the property investment advice that the company provides to clients is regulated, offering some peace of mind.

The company is also the first to offer an overseas jet to let property investment Sipp scheme.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/2283.html. Alternatively, please see our full press release archive.

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