The Pensions Ombudsman (TPO) has upheld a complaint against Rowanmoor Trustees Limited (RTL) regarding the level of investment due diligence carried out in a small self-administered scheme (SSAS).

The complainant, Mr N, set up a SSAS with Rowanmoor Group in 2014, and informed Rowanmoor that he wanted to invest £62,500 of his SSAS fund in The Resort Group, which was developing a hotel in Cape Verde.

At that time, RTL was the sole trustee of the scheme, TPO noted, and had a responsibility for how scheme funds were invested and ensure due diligence was carried out.

Mr N was subsequently named as a member trustee of the scheme, after informing Rowanmoor that he wished to proceed with the investment.

TPO ruled that the investment was not appropriate, and the lack of due diligence carried out by RTL caused a “financial loss” to the member.

Reflecting the shared responsibility with the member trustee, TPO directed that RTL ensure that a sum equivalent to 80 per cent of the initial loss amount was returned to the scheme.

It also ordered RTL to make a payment of £1,000 to the complainant for “serious distress and inconvenience” they suffered due to RTL’s failure to discharge its duties as co-trustee in relation to the selection of investments.

However, the complaint against Rowanmoor Executive Pensions Limited, a subsidiary of Rowanmoor and the SSAS administrator at the time of the events, was not upheld as it was not responsible for carrying out the level of due diligence suggested by the complainant.

“TPO has seen a number of complaints from individuals who have transferred their pensions in order to invest in unregulated investments, such as fractional ownership schemes,” TPO stated.

“In the most part, these have been made via transfers into SSAS’s where the member is the sole trustee and thus solely responsible for investment decisions.

“In this instance RTL was a joint trustee with the member, and for a period of time was the sole trustee of the scheme, charging the member for professional trustee services.

“TPO is considering other complaints about due diligence in SSAS schemes provided by Rowanmoor and RTL and is looking at how these cases can be bought to resolution as quickly as possible.

“It should be noted that complaints could have different outcomes depending on how each scheme was set up and the investments they contained.”

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