Non-standard investments may well be ditched from self-invested personal pensions, according to industry experts.
It seems the writing is clearly on the wall for anyone to see: esoteric, unregulated, unauthorised schemes that are allowed to remain inside the Sipp wrapper are relicts of a careless time and should be consigned to the archive of bad ideas.
But while advisers and many Sipp providers themselves agree such dubious investments should not be allowed into someone's pension portfolio, it seems the regulator has fallen behind on its own consumer protections.
Instead of banning such investments as Costa Rican teak plantations, Chernobyl-based agriculture and graveyard plots, the Financial Conduct Authority – and its predecessor, the Financial Services Authority – has merely warned over the past decade or so.
This has left the industry at a fork in the roads, with some schemes choosing to ditch non-standard investments completely, while others permit some to remain on offer for clients.
I can see why the FCA does not want to become a product regulator: it does not want to stifle innovation (the official line) nor does it want to open itself up to culpability if it permits an investment that ends up being dodgier than a holiday development in Eritrea (the unofficial line).
But surely some firmer rule than a wobbly line drawn in the sand is needed if we are to avoid costly and time-consuming court cases, such as the recent Berkeley Burke v Financial Ombudsman Service.
At the end of the day, Sipp providers are responsible for what they are providing. If a diner sees something on the menu that might not be good for him or her, the diner still has the option of ordering that it.
Similarly, allowing some non-standard investments to remain on the 'menu' of options for Sipp and small self-administered scheme investors does signify to potential clients that, if it is on the menu, it is okay for them to order it.
Taking such investments off the menu altogether may seem like a reduction in the choice available, but it is better for the client in the end.
Providers are already taking note of this – so why is the regulator, with its customer protection hat on, dragging its heels on this one?
Simoney Kyriakou is deputy editor of Financial Adviser