FSA's review is biased towards Sipps - AJ Bell
AJ Bell says the watchdog's review of pension transfers is overly concerned with the sale of Sipps
The FSA's thematic review of pension transfer advice has a Sipp bias, according to Billy Mackay
He added that the regulator is also looking at the pension transfer advice of personal pensions, stakeholders not just self-invested personal pensions.
Mr Mackay, head of marketing at AJ Bell, said a lot of the focus has been solely on Sipps, but the review may have an affect on other pension products too, depending on the FSA's findings.
The FSA stated: "We have identified a significant growth in single-premium transfers into personal pension plans, including Sipps. We set up a project to assess the risk of poor quality advice when transferring into Sipps. The project now includes transfers into PPPs, including Sipps."
Mr Mackay said: "There is a tendency to generalise on the fact that the thematic review and any treating customers fairly issues affect Sipps. TCF must be considered in all client recommendations. For the thematic work, the focus is on ensuring transfers to personal pension and Sipps have considered all aspects of suitability like: needs analysis, analysis of costs, penalties involved and the benefits and documentation of how the new scheme is at least as suitable as stakeholder."
AJ Bell specialises in the provision of trustee, administration and actuarial services for Sipp and small self-administered schemes.
John Moret, director of sales and marketing for Suffolk Life, said that when the FSA originally launched the review it was on the back of some suggestions that some of the transfers from traditional personal pensions into Sipps might not have been suitable.
He said: "The FSA was undertaking a thematic review of the suitability of advice on Sipp with a particular focus on transfers. It made another announcement around the pension transfer area as a whole and opened out the remit. The FSA is in dialogue with a number of providers. The regulator is also looking at the whole area of disclosure of charges that is not part of the thematic review."
Bob Perkins, IFA for Aegon UK-owned Origen, said that Sipps have hit the limelight because the FSA is concerned that Sipps may be being sold for the wrong reasons and he said the industry should know about the pension transfer market.
He said: "There are several issues as far as pension transfers are concerned. With Sipps quite often you get a product which has the marketing name of a Sipp but does not provide the range of services. Some people would be better off with a simple product. There is significant growth into personal pensions because you have bulk off-loading from defined benefit schemes."
The FSA is planning to publish the results of its review by the end of the year.