“Of more concern for SIPP Operators is confirmation that the Pathways need to be up and running from 1 August 2020, unless less than 500 of the SIPP firm’s members have gone into non-advised drawdown over the course of the previous year.
“As well as disappointment that our concerns and arguments do not appear to have been addressed, the FCA have confirmed there will be “no safe harbour” for providers deemed by individuals to have given them a personal recommendation by offering a specific investment pathway solution.
“In addition, SIPP operators are left guessing as to whether they will need to establish an Investment Governance Committee to oversee their Investment Pathways - as the FCA have said they will not deliver their decision on this aspect until the last quarter of the year. In the meantime, the clock has already started ticking on getting the Pathways in place – regardless of whether any of the SIPP Operators’ clients will want them or not.
“We are surprised those taking an UFPLS will not have to go down the Investment Pathways route. Those undertaking this option are deemed by the FCA as most likely to want to remain in the “accumulation phase” of their pension planning, and yet taking an UFPLS will automatically trigger the Money Purchase Annual Allowance, which will seriously stifle future contribution potential, if personal tax charges are to be avoided.
“In summary, and in the face of an opaque consultation process that does not reveal the extent to which our concerns were addressed by the FCA, SIPP Operators now have a year to either build an entire Investment Pathways infrastructure from scratch, or make significant business decisions - such as whether to close their doors to non-advised drawdown members.
“All the while, potentially the most obvious solution to the concerns raised by the FCA regarding those in drawdown on a non-advised basis, remains AWOL from their Policy Statement; namely, for such individuals to seek advice when going into drawdown.”
|
