Pension Ombudsman Holds Independent Trustee Liable for High-Risk SSAS Investment Losses
Summary
The UK Pension Ombudsman has found Rowanmoor Trustees Limited (RTL) liable for failing in its duties as independent professional trustee of multiple SSAS pension schemes, upholding complaints from members who suffered substantial financial losses through high-risk unregulated investments. The PO apportioned liability 80-20 between RTL and member-trustees in all but two cases where investments proceeded following advice from a regulated advisor with additional expertise. RTL was directed to calculate compensation based on a comparison of pension values, neutralise remaining high-risk investments, and pay £1,000 per complainant for distress and inconvenience.
“The ombudsman ruled that RTL had not met its duties as an independent trustee, failed to carry out sufficient due diligence and concluded – based on established case law – that no reasonable trustee would have allowed the schemes to take part in these investments.”
Independent trustees appointed to schemes with exposure to unregulated alternative investments should review their due diligence documentation and confirm they have formally recorded active consideration of each investment decision. The Ombudsman's position that risk warnings and member insistence do not override trustee duties means that robust, contemporaneous records of professional judgment are essential.
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What changed
The Pension Ombudsman determination covers a group of linked complaints brought by members of small self-administered schemes administered by Rowanmoor Group plc with Rowanmoor Trustees Limited acting as independent professional trustee. The PO found that RTL failed to carry out sufficient due diligence and allowed schemes to invest in high-risk, speculative, unregulated investments clearly unsuitable for pension schemes. Crucially, risk warning letters, member acknowledgements, and exoneration and indemnity clauses in trust deeds did not absolve RTL of liability. The PO held that no reasonable trustee would have allowed the schemes to participate in these investments, and that RTL either misunderstood or ignored its trustee role.
For independent trustees and scheme administrators, the determination reinforces that active expert judgment is required when appointed as independent trustee. The decision confirms that trustees cannot rely on risk warnings or member insistence to override their duty to veto unsuitable investments. Trustees administering schemes with exposure to alternative or unregulated investments should review their due diligence processes and documentation to ensure they can demonstrate active engagement with investment decisions.
Penalties
£1,000 per complainant for distress and inconvenience
Archived snapshot
Apr 23, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
Out-Law / Your Daily Need-To-Know
OUT-LAW NEWS 2 min. read
Pension Ombudsman holds independent trustee accountable for financial loss caused by high-risk investments
22 Apr 2026, 9:45 am
Follow Pensions & long-term savings
A recent decision by the UK Pension Ombudsman (PO) highlights the need for clear and obvious delineation between administrator and trustee roles when advising on high-risk investments.
The ruling comes in the wake of earlier findings around similar complaints, with the PO confirming the need for a robust and clearly defined approach to independent trustee duties when accessing unregulated alternative investments.
Simon Laight, a pensions expert with Pinsent Masons, said the ruling emphasised the need for clear delineation between administrator and trustee roles, with scrutiny from the regulators likely to fall when there was a concentration of investments in high‑risk alternatives.
The determination covered a large group of linked complaints brought by members of small self‑administered schemes (SSASs) administered by Rowanmoor Group plc (Rowanmoor) with Rowanmoor Trustees Limited (RTL) acting as independent professional trustee. The applicants had complained about their pension schemes suffering substantial financial loss after being invested into high‑risk unregulated investments.
Each of the complainants had either established or converted to a SSAS, usually after receiving an unsolicited approach or advice from unregulated introducers.
Although the complainants were also trustees themselves, RTL was appointed as an independent trustee, and charged a fee for “professional responsibility” under the trust deed and rules of the scheme.
The applicants had alleged maladministration and breach of trust due to a failure to conduct sufficient due diligence and allowing the investments to proceed. The claim against RTL as independent trustee was upheld by the PO.
The ombudsman held that Rowanmoor, in its capacity as scheme administrator, had broadly discharged its role satisfactorily and did not uphold complaints against it in that respect.
The PO reviewed each investment category underlying the complaint and found many of the investments were high risk, speculative, unregulated and clearly unsuitable for pension schemes. Crucially, risk warning letters and member acknowledgements did not absolve RTL of liability. The exoneration and indemnity clauses in the trust deeds were also deemed ineffective.
The ombudsman ruled that RTL had not met its duties as an independent trustee, failed to carry out sufficient due diligence and concluded – based on established case law – that no reasonable trustee would have allowed the schemes to take part in these investments.
RTL was heavily criticised for systemic failures in its role as an independent trustee by the ombudsman, which said the firm had either misunderstood or ignored its trustee role, failing to discharge its duties properly and breaching its duty of care.
Although he recognised that applicants were also member‑trustees, the PO held that RTL, as an independent trustee, was uniquely positioned to apply expertise and veto unsuitable investments as decisions required unanimity. In all but two complaints where investments were made following advice from a regulated advisor with additional expertise, the PO apportioned liability in a 80-20 percentage split between RTL and the member-trustees with RTL being predominantly liable.
RTL was directed to calculate compensation based on a comparison of what the pensions would have been worth had they remained in prior schemes against the actual value of the failed investments, and to pay the appropriate percentage of the loss back to the schemes.
It was also ordered to take ownership of, or neutralise, any remaining high-risk investments and ensure applicants are not exposed to ongoing costs or liabilities, as well as to pay £1,000 compensation to each of the complainants for distress and inconvenience caused by a failure to apply clearly established principles in previous determinations.
Charlotte Scholes, a pensions litigation expert with Pinsent Masons, explained: “The determination acts as a reminder that appointment as an ‘independent trustee’ r equires active, expert judgment and trustees must actively refuse to proceed with unsuitable investments.
“The decision reinforces the ombudsman’s stance on high-risk, unregulated investments and independent trustee accountability. Significantly, risk warnings and member insistence do not override trustee duties.”
- Pensions & long-term savings
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- United Kingdom Contact an adviser
Simon Laight Partner
+44 7880 740 251 [email protected] View Profile
Charlotte Scholes Partner
+44 7788 945 014 [email protected] View Profile
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