PensionsJan 27 2016

Regulator ready to wind up failing Sipp providers

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Regulator ready to wind up failing Sipp providers

Last month, Mr Steedman predicted the changes could lead to some businesses being swallowed by others. “This change is hugely significant and will definitely give some owners of Sipp businesses a very large headache by way of the complexity of calculation and the capital holding required, which for some could be upwards of millions,” he stated.

Neil MacGillivray, head of technical support at James Hay Partnership and chairman of the Association of Member-Directed Pension Schemes, said there is still room for further consolidation, but questioned which providers would be willing to take on the increasingly risky-looking books of business still for sale in the market.

“Providers are between a rock and a hard place, would you take on a book if you didn’t know the end liability, especially given the potential for comeback from the ombudsman?”

Rowanmoor’s head of pensions technical Robert Graves has argued post-September, the industry may move back to an earlier state, where mass-market personal pensions are offered by bigger providers - with consumers self-selecting from standard options - while more sophisticated investors are catered for by smaller bespoke operators, offering more niche investments with “lighter touch” regulation.