In a letter sent out to operators last week, the regulator said it expected providers to “demonstrate they are meeting our requirements”.
The FCA will scrutinise financial resources, the quality of businesses within schemes and operational procedures.
Where Sipp operators are unable to demonstrate their compliance with regulatory responsibilities and fail to show they have the best interests of consumers at the heart of everything they do, the regulator warned firms would be subject to regulatory action.
The review follows an earlier thematic report, published in 2012, which highlighted the then-FSA’s intention to carry out further supervisory work across the Sipp operator sector.
Last week also saw the FCA publish a 14-page finalised guidance paper for Sipp operators, which covered regulatory responsibilities over systems and controls, handling client money, management information, and conflicts of interest.
The guidance outlined the FCA’s requirements regarding relationships with introducers, due diligence, and preventing financial crime.
A spokesman for the regulator said the FCA was “keen to see” improvements in practice that providers had made to their operational procedures.
Tom McPhail, head of pensions research at Bristol-based Hargreaves Lansdown, said while Hargreaves didn’t see this as an attack directed specifically at small Sipp operators, he noticed there seemed to be a regulatory push “right across the pensions sector” towards larger, well-run financial providers.