The complaint was made by specialist financial mis-selling solicitors Anthony Philip James & Co (APJ) on behalf of a client.
APJ says it believes the complaint is unique in receiving a decision as many other similar cases appear to be halted.
An unregulated introducer
The FOS adjudicator concluded that Guinness Mahon should have refused the introduction of business because it was aware the client was given advice by unregulated introducer Avocade.
It said that the provider should have had doubts over the competence and motivation of Avacade, and been aware that it’s business model was likely to result in consumer detriment.
These findings led the FOS to rule that Guinness Mahon should have refused the introduction of business and should pay fair compensation.
Guinness Mahon can appeal the decision.
Glyn Taylor, solicitor at APJ, said: “We welcome this decision by the FOS as it is consistent with the Financial Conduct Authority’s view that Sipp operators should not accept high-risk, illiquid investments in a Sipp as they are manifestly unsuitable as a pension investment.
“We’re aware that very few Sipp decisions are being made by the FOS and we’re pleased that due to the hard work of our expert legal team our client has been awarded redress for the losses they’ve suffered.
“We also expect that, following this decision, the FOS should make similar decisions in cases that are pending against Liberty Sipp,” Taylor said.
The decision also follows the FCA’s executive director of supervision – investments, wholesale and specialists divisions, Megan Butler, confirming in a letter to the Pensions Select Committee that the UK regulator is not looking to ban such investments in Sipps.
Five legal cases
The decision comes as APJ has issued five legal cases against Guinness Mahon. The five claimants allege the Sipp provider worked with unregulated introducers to facilitate Sipp investments into non-standard assets which were not suitable for their needs.
The cases relate to investments between 2013 and 2016 in schemes including Ethical Forestry and Global Plantations.
APJ said it is one of the first legal firms to issue cases against Guinness Mahon. The firm is also preparing to issue a further 20 cases against the Sipp administrator in the coming weeks.