The SIPP market continues to suffer from ‘limited and fragmented data’ as the FCA’s consultation process concludes today (24 August), according to Rich Denning, CEO of Aberdeen Adviser.
The regulator has proposed changes to rules on SIPPs, set out in the CP26/20 paper, but there is much more work to be done according to Denning.
In his view, the FCA is right to address the data challenges affecting SIPP records, reconciliations and oversight, particularly with external providers, but should build on this by working with industry firms more closely.
“Consistent industry data standards would improve member-level information and reduce the need for bespoke data arrangements between SIPP operators and providers,” he noted.
“If the FCA introduces a new PSM&A regulatory return, it should work with industry to establish common definitions, align with existing CMAR reporting where appropriate and avoid duplicate requirements.
“Where information collected for supervisory purposes can also provide useful market insight, the FCA could consider publishing appropriately aggregated outputs to improve transparency and understanding of the SIPP market.
“More broadly, CP26/20 provides a timely opportunity to highlight the limited and fragmented public information available on the SIPP market.”
Denning added it is a ‘broader policy issue’ that extends beyond the current proposals and needs further consideration across the FCA, HMRC and Department for Work and Pensions.
Julia Sage-Bell, senior policy adviser at PIMFA, speaking on behalf of the UK Platform Group, said: “While we broadly support the FCA’s proposals around due diligence checks on SIPPs, a number of requirements being put forward need further clarity.
“First and foremost, the FCA must set out clear expectations of firms and establish how proportionate these checks have to be. This will allow firms to assess what resources they would need to deploy, and determine whether the proposals are realistic. This is a particular concern around legacy arrangements.
“In their current form, the proposals risk imposing a host of unintended consequences on consumers with legacy assets,” she added.
“In cases where firms have inherited arrangements, through acquisitions, in-specie transfers or historic business models, firms may not have sufficient influence to implement new terms of business or revised contractual obligations.”
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Mark Rendle, AJ Bell advised managing director, said: “The whirlwind of change for SIPP providers is showing no sign of slowing down, and over the next few years pensions are facing a packed agenda of regulatory and legislative change, from introducing inheritance tax on unused pension funds, new disclosure rules and a new value for money framework.
“Although the FCA’s overall goal makes sense, after all, it’s fundamental that SIPP customers’ pension money is protected, the actual rules need some refining to make sure they better reflect that ultimate objective. The final framework should be proportionate, practical to implement and focused on the risks the FCA is aiming to address.”
