Advisers have voiced their disapproval of The Pensions Regulator’s suggestion to ban small self-administered schemes (Ssas) but have called for tighter controls.
A survey of advisers conducted by Dentons Pension Management found 98 per cent believe Ssas products should not be done away with but instead should have stricter guidelines.
The Pension Regulator urged the government last month to consider an outright ban on Ssas as it claimed the schemes were susceptible to scams and criminal abuse.
The majority of advisers who participated in the Dentons survey said they would prefer to see HMRC introduce a list of approved Ssas operators, while around half said that Ssas professional trustees should be made responsible or asset acceptance, or that a list of Ssas permitted investments should be introduced.
Dentons’ director of technical services Martin Tilley said that while the results show a clear need for Ssas to remain in the industry, better controls are needed to ensure that consumers are not exposed to poor or fraudulent products.
“The results of the survey show there is a strong belief that Ssas is still a valuable financial planning tool and that they have a place in the pensions industry. We are under no doubt tighter controls are needed in order to protect clients from being scammed, a number of which have been suggested in responses to the recent consultation.
“It’s obvious that financial professionals are in need of some clear guidance on how to keep client funds safe in their request for a list of approved Ssas operators and permitted investments.”
Tom McPhail, head of retirement policy at Hargreaves Lansdown, said Ssas often suffer from poor governance, and the number of Ssas in existence makes it difficult for regulator to look after them properly.
“Even if it’s run externally there’s not much regulation or responsibility for managing them properly.”
Mr McPhail suggested that it should be a requirement that all Ssas have a pension trustee, or that these small schemes could potentially roll into larger occupational schemes.
julia.faurschou@ft.com
