New capital requirements are set to come in this year for providers of self-invested personal pensions but whether all firms are ready is yet to be seen, a specialist has claimed.
Robert Graves, head of pensions technical services at Rowanmoor Pensions, said many providers should have already been getting ready for the new capital requirements, which come into place this September.
In addition to making sure that their firms have the funds set aside for the capital adequacy requirement, Mr Graves said many providers should have already been doing work to collect data, on each quarter date, around the assets under administration, because this is on which the capital adequacy formula is based.
“Providers should have also been determining what sort of assets they have - whether these are standard or non standard”, Mr Graves said.
However, he explained that many firms were still having to sift through the Financial Conduct Authority’s guidance on standard assets, as there were “still some ambiguities” and firms were “having to make an interpretation as to whether some assets were to be treated as standard or non standard”.
One classic argument on this issue was about commercial property, and how this was to be treated, while there was also some ambiguity around fixed-term deposit accounts, he added.
Mr Graves said that the board of Rowanmoor had already decided to make provision now for up to 100 per cent of the requirement in readiness for September.
There was also an issue of consolidation among Sipp providers, he said, adding: “Consolidation has been a perennial question since Sipps became regulated.
“But where running of the Sipp portfolio is not core to a company’s business strategy” - and this might have been one of the rationales for Legal & General selling off Suffolk Life - then “many providers may consider whether it is worth running a Sipp division if it is not core to their business model”, he added.
Mr Graves also talked about the level of complaints on Sipps, what the level of upheld complaints meant for the industry and whether the FCA was still keeping an eye on the Sipp market over mis-selling or wrongful advice.
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