Dentons slams FCA for ‘lack of clarity’ on Sipp rules

A “lack of clarity” from the regulator on strict capital adequacy requirements to be introduced for Sipp providers is “frustrating”, according to Dentons.

As we head into 2014, Martin Tilley, director of technical services at Dentons, said the industry could be certain of the Financial Conduct Authority’s commitment to its third thematic review of the Sipp market.

However, he said there remained “considerable uncertainty” surrounding the impact these announcements will have on the industry and whether it would lead to increased consolidation, and ultimately a reduction in the number of providers servicing the market.

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Mr Tilley said: “The long awaited capital adequacy rules - which are now scheduled for the second quarter of 2014 - will strongly dictate how aggressive and active Sipp providers can be with acquisitions and growth plans to augment propositions.

“Although the current lack of clarity around what the new rules mean for providers is frustrating, Dentons is in a strong position to be able to meet future requirements. We will be continue to actively explore potential opportunities for strategic growth with companies that meet our criteria.

“Ultimately, we are optimistic that the changes recommended by the FCA next year will be good for the profession and the reputation of our industry. It remains crucial however, that any changes introduced do not result in higher costs for consumers.”

On the Ssas market, Mr Tilley said there had been a notable uptick in the popularity of these schemes this year. He said the regulatory uncertainty in the Sipp market lead many advisers to consider these vehicles for clients.

Mr Tilley said: “While the revival of Ssas is set to continue into 2014, it is important that providers continue to take stringent precautions to protect the industry and clients against pensions liberation fraud.

“This self-policing should include being selective of new cases and reviewing each Ssas client carefully to help ensure no stone is left unturned in the protection of clients and the reputation of our industry.”