FTIF: FSA accused of using sledgehammer to crack a nut
The FSA and HM Revenue & Customs should be nurturing self-invested personal pensions not attacking such schemes, IPS Partnership told advisers gathered at the FT Intermediary Forum.
Speaking just before lunch today (11 May), Richard Mattison, business development director of IPS Partnership, said HM Revenue & Customs (HMRC) and the FSA had taken a dislike to self-invested personal pensions but the problem was the public loved this type of product.
During a panel debate, entitled Sipps and platforms – the future of pensions, he said: "I don't understand why the regulator has started to attack these products. They should be nurtured, looked after and encouraged.
"It is complicated enough. The FSA approach is to make it even more complicated than it already is. The key objectives of the FSA are very sensible but it is using a sledgehammer to crack a nut on this one.
"Unnecessary internal procedures being thrown at the provider will just make it more expensive for the customer. That does not make it better for the consumer."
But fellow panellist Mark Pearson, director of business development of Origen Financial Services, said the City watchdog was taking the right approach to regulating Sipps.
He said: "Why is the FSA taking this approach? The FSA does not have an issue with Sipp for commercial property. It has an issue with recommendations that state it was chosen because the client said they wanted flexibility in the future. I support that view.
"They are looking at Sipps where the client never used the flexibility."
Fellow panellist Jason Butler, chartered financial planner of Bloomsbury Financial Planning, said he supported closer scrutiny of charges.
He said: "All I want is for them to not allow Sipp providers to take back handers."
Mr Mattison said he would welcome recognition from the FSA that there should be some restriction on the type of person who should be able to manage their own Sipp.
He said: "With a Sipp only a certain type should be allowed to do it, such as high net worth or experienced investors."
Harry Katz, principal of Middlesex-based Norwest Consultants, said: "The average size of a pension in the UK about £20,000 - it is tiny. What is the point of putting that sum into a Sipp?"
