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Regulation and the adviser’s requirements

This article is part of
Guide to Ssas

“Unlike a personal pension scheme or a Sipp, the provision of a Ssas or services in relation to a Ssas are not regulated by the FSA,” says John Glover, business development manager at City Trustees.

Andrew Roberts, partner at Barnett Waddingham, adds that there is a legal requirement for trustees of company schemes, including Ssas, to have an adequate level of knowledge and understanding to be able to carry out their duty as a trustee.

“FSA-authorised advisers have to apply the same principles to non-regulated products as regulated products and so RDR has to be taken into account when they recommend Ssas or advise on the investments,” he adds.

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Carl Lamb, managing director of Almary Green, notes that while Ssas are still unregulated, many of the underlying investments may well be regulated.

Lisa Webster, senior technical consultant for Hornbuckle Mitchell, adds that advisers should recommend a Ssas provider that also administers Sipps, as it will therefore be regulated by the FSA.

“With a regulated provider you know they will have tighter systems and controls, capital adequacy requirements and operate TCF. This may not be the case if unregulated.”

But Mr Roberts disagrees, saying specific familiarity with Ssas is more relevant: “It is likely to be more appropriate to ensure that the provider has relevant experience which may be the case whether they administer Sipps or not.

“There is no additional protection afforded by a company that also administers Sipps.”

An adviser’s requirements are no more than they would be for a Sipp, as the scheme administrator should be registered with HMRC for online services. Mr Roberts says this is usually the Ssas provider, but could be the sponsoring employer, the trustees collectively, or one of the trustees.

Many Ssas specialists believe the new conditions of the Retail Distribution Review could lead to more Ssas business for financial advisers. Mr Glover thinks that the schemes are “perfect” for fee-based advice.

“Clients benefit from corporation tax relief on contributions and they can use a Ssas in more innovative ways to get money back into their businesses,” he explains. “Ssas also have more angles for creative tax planning.”

Mr Lamb agrees: “If anything, RDR will create more of a level playing field so that there is no commission bias and Ssas can be considered on their merits of which there can be clear advantages over and above Sipps.”