Sipps still being used for Ucis despite failures
Investors still keen to put funds in unregulated collective investment schemes despite high profile failures, Sipp Investment Platform has warned.
Kevin Jack, director of Sipp Investment Platform, said most of these Ucis products are looking to raise capital for hotel developments/room ownership, acquisition of housing stock or to develop overseas forestry schemes.
Mr Jack said: “Pension trustees are in an invidious position of both the FSA and HM Revenue & Customs suggesting they should be taking more care over the quality of business they take on but with only limited guidance of what both agencies are specifically looking for.
“This has led to inconsistent approaches by pension operators and fears that they are either not doing enough or possibly doing too much and therefore straying into inadvertently providing an opinion on the merits of a particular investment, which is clearly outside their remit and FSA permissions.”
He said HMRC and the FSA were also monitoring scheme members using pension liberation schemes.
In response, the Association of Member-Directed Pension Schemes has recommended members encourage investors to sign a declaration they are not receiving incentives to enter investments.
Amps has also warned that rather than regulate pension trustees to compel them to keep a closer eye on investments, the Serious Fraud Office and FSA should take responsibility for combating fraudulent schemes.
Providers have also warned that dodgy Ucis schemes risk damaging confidence in pensions. Greg Kingston, head of marketing for Suffolk Life, said: “Sipps have become a target for fraudsters as it is an easier area to find large sums of money.
“The amount of potential fraud is a fraction of the genuine assets, but it is the negative information that makes the news and could put people off saving.”
David Trenner, technical director of Glasgow-based Intelligent Pensions, said pension trustees must also take some irresponsibility.
He said: “The larger Sipp providers have generally worked out that the U in Ucis stands for unregulated, and they refuse to allow investments in them.
“Smaller providers are fighting for any scrap of business they can get.”