Christine Hallett, CEO of Carey Pensions UK, looks at the key
business drivers for Sipps over the coming years and why dealing
with tried and trusted providers always makes sense in an
unpredictable and rapidly evolving marketplace.
The spotlight on SIPPs and SIPP operators in general, continues
to increase. Advisers need to conduct diligence and ensure SIPP
providers have adequate governance and systems and controls in
place. It is important that advisers deal with robust SIPP
providers with tried and tested business models and governance
frameworks; providers they are confident will survive the next
period of change within this marketplace.
What are the drivers that will shape the SIPP marketplace in
the coming years?
The finalisation and outcome from the FCA thematic review
New Capital Adequacy requirements
The FCA Thematic Review
As a result of SIPP regulatory changes, reviews etc., business
models have changed. For example, we continue to see consolidation
in the marketplace, and this is set to continue. The due diligence
and business acceptance policies of most SIPP operators that allow
non-standard assets are likely to have been changed and the
marketplace is settling into the new regulatory regime.
Many SIPP operators have obtained exemptions from the FCA to
undertake such investments, and most advisory firms must take
responsibility for pension transfer advice and also advice for
non-standard assets. The world is a more structured, robust and
strongly controlled environment now, in respect of SIPP
New Capital Adequacy requirements
The majority of SIPP operators who provide a full SIPP and allow
some element of non-standard asset classes, are now determining
what their capital adequacy requirements will be in September 2016.
As a consequence, there will be some who decide it's a step too
far and again seek to exit the marketplace. And there continues to
be certain companies circling SIPP providers to snip up those
companies that feel squeezed by the new regime and I am sure we
will see more changes shortly, as operators consider their 5 year
plans and the strategies they want to follow.
Pension providers are now revealing their proposition for flexi
access, and we anticipate that there will be a great surge of
interest to withdraw individual pension funds. There has never been
a greater need for financial advice in this area. However, more and
more responsibility is being laid at the door of the product
providers too. The need for risk warnings increases. There is mixed
opinion as to whether it is a good thing or a bad thing, and both
sides of the argument have a point. But as with most regulatory
changes implemented, no-one ever really sees the impact until some
years down the line. However, one thing is sure, the process by
both the adviser and the product provider needs to be well
documented and evidence will need to be retained to ensure that the
information about the potential impact to individuals is very
Watch this space for the first disaster to be published.
What impact will this have on the adviser and SIPP industry? For
those that embrace change, and seek to increase their
professionalism and create valued products for clients, it will
make their business stronger. Ok, it increases overheads, but if
there are fewer companies in the industry the slice of the business
for each of those companies gets bigger, so the rewards will be
there for those that put the effort in now.
It means that relationships will change; every part of the
solution has to step up to the mark and deliver to the standards
set. We should all be trying to deliver the most compliant, well
run company that the client can have confidence in and can be
comforted that we are striving to provide the best that we can.
Carey Pensions UK is a SIPP provider that is working with
advisers who want to use a company that has strong ideals and is
prepared for the regulatory changes that are being implemented, and
can provide the support they need
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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