PensionsOct 30 2015

FCA investigating non-standard Sipp investment advice

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FCA investigating non-standard Sipp investment advice

Today (30 October) the Financial Conduct Authority confirmed it is collecting information from self-invested personal pension providers with the goal of identifying which advisers are placing clients in non-standard investments.

Sipp firms will have to hold capital based on assets under administration, from September 2016, with an additional allowance related to the proportion of non-standard assets held.

The regulator has asked firms to hold an audit of the non-standard assets they hold, including listing how they are distributed. This exercise will include information on authorised advisers, unregulated advisers or directly executed business.

Speaking to FTAdviser, Talbot and Muir director and head of pensions technical Claire Trott said that the FCA is clearly taking the issue with unregulated and non-standard assets very seriously.

“The data request is very comprehensive, looking not only at those advisers who have recommended non-standard or unregulated investments, but also those that have been introduced on an execution only basis.

“This will bring out details of those advisers who have recommended a Sipp, but avoided making a recommendation on the investments, something which the FCA has frowned upon.”

She noted that the amount of time given to provide this information is fairly short, which may indicate that the regulator sees this as an urgent issue and wants to get a handle on the scale of the issues that could arise over future months.

“We saw the level of complaints against advisers with regards to Sipps and advice on them rise again in the last data provided to the industry and this may have been the trigger for the FCA to understand what may still be to come.”

Last week, Financial Ombudsman Service statistics showed that complaints about self-invested personal pensions rose by a third during the second quarter of 2015/16, compared to the same period last year.

In March, the Financial Services Compensation Scheme issued a £20m interim levy on life and pension advisers in March due to the rise in Sipp claims, with a warning that the number and costs of complex Sipp-related decisions would rise steeply during 2015/16.

ruth.gillbe@ft.com