Moret says ring-fence historic Sipp claims to reduce levy

Moret says ring-fence historic Sipp claims to reduce levy

The industry has reached a point where historic self-invested personal pension claims should be left in the past in a move to drive down the Financial Services Compensation Scheme Levy for advisers, John Moret has claimed.

Speaking to FTAdviser about the state of the Sipp market after an impressive 50 years in the industry, Mr Moret said it was about time the industry moved forward and stopped dealing with claims from more than eight years ago.

Mr Moret said: “I can understand why advisers get so upset at having to bail out individuals and organisations that accepted business from either unscrupulous advisers or certainly unregulated advisers. 

“That is not to say I necessarily believe that providers were totally responsible, I believe there is a shared responsibility to be quite honest. 

“But the sooner we can reach a point where those historic claims are effectively ring fenced the better it will be and would have benefits in terms of funding the FSCS going forward.”

Otherwise known as “Mr Sipp” due to his advocacy for the pension products, Mr Moret said his latest ambition was to “sort the Sipp market out once and for all” and claimed that there were two issues currently affecting the industry.

One is a legacy issue which, Mr Moret argued, could be fixed by leaving problems in the past and moving forward.

He said: “It would be really helpful if the regulator accepted that there was a period between 2007 and 2012 when providers were not entirely clear what their responsibilities were, particularly in terms of investment due diligence. 

“The FCA could then say that for any investments made during this period, providers would just need to show that they actually operated in line with their understanding at the time. And if we could just put those legacy issues to bed, it would help enormously.”

He added: “The reality is that most of these claims have now reached the courts or the Financial Ombudsman Service or the FSCS where providers have gone into administration. 

“I don't think there are many more, or indeed any more, to come through in terms of investment and providers getting into trouble on the back of them. 

“There are obviously a lot of claims still pending, most of which look like they will end up with the FSCS."

In July 2014 the FCA published a Dear CEO letter to all Sipp providers warning of failings on due diligence on non-standard investments, but before then providers were still unaware as to what their responsibilities were.

"I just think if we could find a way of drawing a line in the sand on those historic issues, it would make a big difference and 2012, around the time of the second thematic review, is the logical place because beyond this most providers were very clear of their responsibilities," Mr Moret said.

Last year, there was a missed opportunity to provide certainty for the Sipp industry and set a precedent for the debate surrounding Sipp provider responsibility when accepting assets, after Berkeley Burke Sipp dropped its appeal against a Financial Ombudsman Service decision from 2014.