The volume of compensation claims relating to advice given to consumers to switch from conventional pensions to a Sipp is growing rapidly according to the Financial Services Compensation Scheme.
The organisation's chief executive Mark Neale has expressed deep concerns today about the growth in such claims.
FSCS has started to receive claims against firms such as TailorMade Independent Limited, which failed in October 2013.
In the FSCS annual report released this morning, the body stated: "In recent years FSCS has seen increasing numbers of complex investment claims including, over the past year, escalating volumes of pension advice claims relating to advice to switch to a Sipp."
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It reported that the life and pensions intermediation sector saw an increase in claims in 2013/14.
This was due to an increase in Sipp claims and continuing, although relatively low, volumes of mortgage endowment claims.
Mr Neale said: "I am increasingly concerned by the growing number of claims FSCS has seen in the past year arising from wrong advice to consumers to move retirement saving out of occupational schemes and into risky assets held within Sipps."
The FSCS said it has come across similar problems in this area as have been highlighted by the FCA regarding the conduct of firms such as TailorMade.
It said these had the "potential for significant consumer detriment as a result of investors being encouraged to invest their pension funds in high-risk assets, many of which are illiquid."
The report added: "The result is that investors cannot access their funds. FSCS has
been establishing the liability of the firms involved in this business and the losses that can be attributed to them.
"At times this can be At times this can be complicated by the esoteric nature
of many of the investments placed in Sipps.
"Many of these assets are based overseas and are subject to significant uncertainty as to their status, value or future."