What are unregulated collective investment schemes?
An unregulated collective investment scheme (UCIS) is a type of collective investment scheme (CIS) and is a way that many investors can pool their money. It can be invested by fund managers in a variety of assets – such as holiday resorts, renewable energy, storage pods or units and parking spaces – with the aim of providing growth or income to be shared amongst investors.
A UCIS is not subject to the same requirements as a Financial Conduct Authority (FCA) regulated CIS – such as restrictions on the types of assets it contains – as it does not comply with the rules that would make it qualify for the different regulated fund categories.
Types of complaint we see
Many (but not all) of the complaints we see involve people's pensions. When people contact us to complain they often tell us:
- they are unhappy with advice they were given by a firm to transfer their existing personal pension to a self-invested personal pension (SIPP). They say the advice to transfer, for the purpose of investing in a UCIS, was unsuitable.
- their SIPP provider failed to carry out adequate due diligence checks before allowing UCIS investments to be held within the SIPP.
- they are unhappy about problems related to the fact UCIS can be hard to value and aren’t always traded readily. For example, SIPP providers not allowing the consumer to ‘cash in’ the investment, or SIPP fees continuing to be applied where there’s not enough cash held in the SIPP, due to the majority of the consumer’s pension fund being tied up in UCIS investments.
UCIS should only be promoted to high net worth or sophisticated investors. But many of the cases we see involve the general public taking out these investments, with the UCIS investments typically making up a large proportion of their entire pension fund. And these complaints are often triggered by cases where the UCIS investments have failed, meaning the consumer has lost the value of their investment, or where expected returns on the investment – such as income on hotel rooms or parking spaces – has not materialised.
How to complain
The first thing you need to do is complain to the financial business about what’s happened. They should look into things and reply within eight weeks. If you’re not happy with their response, or they don’t get back to you within eight weeks, you can bring your complaint to us.
We’ll check it’s something we can deal with, and if it is, we’ll investigate. In some circumstances, we can get involved sooner than that – but it depends on what the complaint is about and which business you’re unhappy with. If you can, please try to keep any relevant evidence that will help us understand what’s happened. This could be things like letters, statements, and notes; and you can send copies of these rather than the originals if that helps.
Bringing a complaint to us is free and we try and keep things straightforward and informal. But if you’d rather not tell us some things direct – perhaps because they’re difficult to talk about – you can ask a friend, family member or someone like a support worker to help you with the complaint and talk to us on your behalf.
Find out more information about how to complain.
What we look at
We’ll think about whether the financial business did everything it was required to do, and if it didn’t, whether you’ve lost out as a result.
In doing so we’ll consider relevant law and regulation, regulators’ rules, guidance and standards, codes of practice, and what we consider to be good industry practice at the time. We’ll then decide overall what a fair and reasonable outcome to your complaint is.
When you bring a complaint to us, we’ll talk to you about our process and any evidence we may need to see, depending on what your complaint is about. We’ll explain why we’re asking for information and give you time to provide it.
We’ll ask you to tell us about what has happened, and the effect you feel it’s had on your life. We’ll also ask what you think will help to resolve your complaint, as well as details about the business you’re unhappy with.
The FCA expects financial businesses to take particular care to ensure vulnerable customers are treated fairly. We’ll consider whether the financial business was aware, or ought to have been aware, that their customer was vulnerable, and what support they offered or put in place.
How long it takes
We publish general detail about when you can expect to hear from us as we deal with your complaint. If there’s something about you or your complaint which makes things particularly urgent, let us know when you get in touch. Once your complaint is with an investigator, they will talk to you in more specific detail about timing and next steps.
Putting things right
If we find you have been treated unfairly by a financial business, we’ll ask them to put things right.
What this involves will depend on the nature and type of complaint. It might include, for example, asking the business to put things right by paying you compensation for financial loss or making changes to a credit file. We could tell the business to do things differently for you in the future. And, where appropriate, we can also tell the business to pay compensation for distress or inconvenience it has caused.
Read more about our approach to compensation.
Consumer complains advice to switch to a different pension plan – later used to invest in an unregulated collective investment scheme – was unsuitable
A consumer complains about advice they received to transfer their pension and invest in unregulated, high risk investments
Consumer complains he lost money as he was not advised to withdraw from an unregulated collective investment scheme
Information for businesses
If you’re a financial business looking for information to help you resolve complaints, you can read more about this in our dedicated information for financial businesses on handling complaints involving unregulated collective investment schemes.