The UK's financial services regulator the Financial Conduct Authority (FCA) has today published a consultation setting out proposals in a bid to strengthen and standardise practices across the self-invested personal pension (SIPP) market.
That FCA said that while most SIPP providers are already doing the right thing and providing a good service to their customers it has historically found cases of poor due diligence, weak record keeping and gaps in how firms protect money and assets.
To drive greater consistency, the FCA is proposing clear standards of due diligence. This is intended to secure "better outcomes for consumers by improving consistency and adequacy of due diligence across all SIPP operators".
The Uk financial watchdog said that it was also proposing stronger requirements for the handling of pension scheme money and assets. The targeted and proportionate proposals reduce the risk of consumer harm when firms fail or wind down.
The proposals will bring greater certainty to the industry, improve confidence in the SIPP market and help ensure consumers can invest through SIPPs with greater confidence, it said.
Charlotte Clark, director of cross-cutting policy and strategy at the FCA, said: "SIPPs provide consumers with flexibility and choice. Many firms are doing the right thing, but we want to help consumers invest with greater confidence by ensuring standards are consistent."
Commenting on the consultation, Maurice Titley, Commercial Director of Data & Dashboards at Lumera, welcomed the change pointing to provide "greater clarity and consistency across the SIPP market, reinforcing standards that support both consumer protection and confidence".
“As SIPPs continue to grow in popularity, driven by consumers seeking greater control and flexibility over their retirement savings, it is essential that governance, due diligence and asset protection frameworks keep pace with that growth," he said
“Achieving this will require strong data governance, efficient operational processes and technology that enables firms to manage increasingly complex requirements without compromising service.”
“Against this backdrop, as well as the launch of pensions dashboards and increasing focus on value for money, providers that invest in scalable, digital-first operating models will be best placed to meet rising regulatory expectations and deliver better outcomes for members throughout their retirement journey.”
To contribute to the FCA consultation click on this link.
