SIPP  

FCA repeats warning on introducers after Carey trial

“About four or five years ago we’d get calls from investment promoters saying ‘if you accept this business we can give you 20 investors a month,’ he said.

“That, for us, is a turn off for two reasons. One, we don’t believe any introducer will have that number of clients for which that investment product is suitable for them, and secondly, we as a Sipp provider need to manage the risk into our own book.”

According to Jessica List, pension technical manager at Sipp provider Curtis Banks, ensuring due diligence procedures are followed remains key.

“The expectations in terms of due diligence on Sipp providers has changed over the past few years anyway.

"Any providers that have responded to that and have robust due diligence processes in place should in theory not have anything to worry about.”

The FCA was in court giving testimony on the Carey case, in the latest indication it is taking a closer look at the relationship between the regulated and unregulated markets in financial services.

Yesterday (27 March) Capital Alternatives - an unauthorised, unregulated collective investment scheme investing in rice farms in Sierra Leone - was ordered by the High Court to repay £16.9m to investors for pushing investments without authorisation, in a case brought by the FCA.

Although the recent cases have focused on Sipp providers, the FCA also reiterated to FTAdviser financial advisers' responsibilities when dealing with unregulated firms.

“Introducers who introduce customers to [advisers] with a view to those customers purchasing investments may only be able to do so if it is for the provision of independent advice.

"'Independent' in this context means that you are independent of the issuer of the investment.

"It is essential that at all times you maintain full and complete ownership of the advisory process between yourselves and your customer, and any regulated advice you provide must meet the requirements set out in our Handbook.”

Read FTAdviser sister title Money Management's Sipp survey: Success story continues but legal issues lurk for 45mins of CII accredited CPD.