The Financial Conduct Authority (FCA) would be wise to read the comments section of FTAdviser.
Rather than blow any more of your cash on yet another inquiry to see whether there is a problem with self-invested personal pensions – there is – why not read a few Financial Ombudsman Service rulings and listen to our wonderful financial adviser readership?
Many of the Financial Ombudsman Service rulings about Sipps don’t condemn the choice of the product – a vehicle that allows savers to decide how they want their pension invested – but the fact the cash was then ploughed into a dodgy, unregulated investment.
This isn’t a new problem with Sipps or one the industry was unaware of.
But Sipps being used to take pension pots and plough them into dodgy investments is an issue that the regulator just hasn’t done enough to address and we are now facing more negative mis-selling headlines about pensions.
This week John Moret, who was a director of Provident Life when it offered its first Sipp 25 years ago and who is now principal of More2Sipps, revealed thousands of investor claims about investments made into self-invested personal pensions are still pending.
Mr Moret’s annual report on the state of the Sipp market estimated there could be 10,000 Sipp-related claims in the pipeline – but as many as 50,000 investors with potential grounds for complaint.
Central to his calculations is the issue of what the FCA terms 'non-mainstream investments', which tend to be more exotic, higher risk, often unregulated projects such as Brazilian teak farms or storage pods.
The FCA needs to read Mr Moret's report and listen to the wise words of advisers on this issue.
There is no need to pay a load of regulator staff to scratch their heads and sit in a room for months on end to come up with a way to protect savers from blowing their pots, just listen to our reader Simon Torry who offered this solution: "Just ban the use of Ucis within pensions, sorted.”
This is a simple but effective solution and should be taken today.
Otherwise the FCA should continue to expect the likes of one of our readers, who is known as Dr Findlay's Facebook, sarcastically noting, “Not to worry, the FCA will step in one day and will surely sort it all out".
Any action now is too late to stop 50,000 complaints but it would be better than nothing.