Sipp providers cautious after FSCS announcement

Sipp providers cautious after FSCS announcement

Self-invested personal pension providers have said they are adopting a "wait and see" approach to the issue of setting aside cash to deal with potential claims from the Financial Services Compensation Scheme.

In yesterday's (16 January) announcement, the FSCS said it has received a number of claims against Sipp providers for due diligence failings and it said if it is satisfied that a legal liability arises and these claims are eligible, the cost of these claims would be levied against investment providers.

FTAdviser asked some providers how they were positioned on setting aside cash to deal with potentially greater FSCS levies or claims against their businesses.

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Martin Tilley, director of technical services at Dentons, said: "There is no greater possibility for claims against the business, there will be no greater exposure.

"However, the potential levy and future claims on the industry as a whole are unavoidable.

"The suggestion that it would be moved to product providers will spread the burden."

He added with regard to the increase in levies expected to be paid, as unfair as this may seem, it does not change how it is going to be funded.

A spokesperson for AJ Bell told FTAdviser it is "too early" to provide any comment on whether it will have to set aside more cash.

The spokesperson added: "It is a wait and see situation. We will see how the situation pans out and then decide."