The self-invested personal pension label can be misleading should be renamed, according to John Moret, principal at MoretoSIPPs.
Moret expects the self-invested personal pension market to break through the £500bn asset mark in 2022 with customer numbers looking to exceed 3m.
But he pointed out self-invested personal pension savers have increasingly less involvement in the actual investment process and therefore the label no longer made sense.
Moret said: “A growing number of Sipp providers are in fact no more than glorified ‘personal pension’ providers offering a limited range of investments.
“I have believed for some time that the Sipp label is now misleading, and I wonder if it is time to kill it off and revert to a more appropriate title such as an Individual Pension Account (IPA).
“Until that time it would be very helpful if we got total clarity and agreement from all parties and regulators around the responsibilities of a Sipp provider.”
Late last year (November 25), the Financial Conduct Authority proposed Sipp providers should offer a default investment option to help the non-advised save for retirement.
This would have to be a “diversified basket of investments” and take account of climate change and other environmental, social and governance risks, but would exclude advised Sipps and bespoke Sipps.
Moret said these proposals represented a “strange outcome” given that Sipps were created to do the opposite - offer investors greater investment choice.
Elsewhere in the industry, Moret warned claims management companies were fuelling growing numbers of Sipp related claims to the Financial Ombudsman Service creating a “significant and costly burden” for many Sipp providers.
Moret said: “Understandably Fos appear to be relying on the judgment in the Berkeley Burke v Fos judicial review to find in favour of many claimants.
"While that judgment in 2018 was helpful in determining a Sipp provider’s responsibilities, I find it hard to accept statements in a determination that suggest that investment and introducer due diligence was good industry practice at the time, primarily between 2009 and 2012, when most of the Sipp problems first arose. That simply wasn’t the case.”
Sipp providers are still waiting to learn if Options (formerly known as Carey Pensions) will be granted permission to appeal in the Supreme Court the judgment by the Court of Appeal in the long-standing Adams v Carey case.
In the Court of Appeal’s decision earlier last year (April 2021) judges overturned a previous High Court ruling and sided with the claimant, who had lost money after investing in high risk unregulated investment Store First via his Sipp.
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