An increase in ombudsman complaints about UCIS has been predominantly driven by the rise in complaints from consumers who had taken out Sipps.
The Financial Ombudsman Service told Sipps Professional that it has upheld a disproportionately high number of UCIS cases – currently 57% - compared to a third for pensions in general.
Although complaints about UCIS are not recorded separately the FOS team said they had seen a jump in the numbers and these had been fuelled by a “significant increase” in complaints linked to Sipps.
The FOS told Sipps Professional: “During the last two years we have noticed an increase in the complaints we see about unregulated collective investment schemes mostly driven by the advice given.
“UCIS themselves can often be complicated. But the fact remains we uphold a disproportionately high number of these cases – around 6 in 10 (currently 57%).
“This is against an average uphold rate for pension cases of one third. This doesn’t mean it’s always wrong to advise people to take out these products – but should be made aware that they are more appropriate for the experienced investors who are willing to take a greater risk”.

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The FOS also reported that FCA rule changes surrounding UCIS have led to some investors reviewing their existing arrangements and questioning the advice they were previously given.
Many complainants who contacted the service said they weren’t made aware of the risks involved in investing in UCIS, according to the FOS.
In the ombudsman’s latest newsletter, released yesterday, officials said there appeared to have been an impact since the regulator’s restrictions, which were put in place in January 2014.
The FCA restricted the promotion of UCIS to only “sophisticated” and “high net worth” investors – to reduce the likelihood that they’ll be sold to ordinary retail consumers.
The FOS newsletter stated: “These rule changes seem to have alerted some investors to review their existing arrangements – and to question the advice they were previously given.
“There’s been some confusion over whether or not we can look at complaints about UCIS – because by definition they’re 'unregulated'.
“But while the schemes themselves are unregulated, the actual advice given by businesses is often regulated – and so covered by us.
“The fact that someone may appear to be an experienced investor doesn’t automatically mean they’re eligible to have UCIS promoted to them.”
The cases seen by FOS officials often feature investors claiming to have been ignorant about what it meant to get involved in the schemes.
The newsletter stated: “In many of the complaints we see, people tell us they weren’t made aware of the risks involved in investing in UCIS – or that they didn’t know what exactly they were investing in. Some people say that, until something went wrong, they hadn’t even heard of UCIS.
“If a complaint is referred to us, we investigate whether the business carried out the checks required at the time they gave the advice to invest. We’ll also look at key sale documents from the time.”