Pensions - Articles - SIPP Operators placed at a commercial disadvantage

James Jones-Tinsley from Barnett Waddingham said: “Despite a number of SIPP Operators – including ourselves – arguing that they should be ‘carved out’ of the requirements to offer Investment Pathways, the FCA are pressing ahead with their implementation, on the back of a supposedly ‘broadly supportive’ response to January’s Consultation Paper.

 “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.”

Back to Index

Similar News to this Story

PLSA launches Retirement Living Standards
New Retirement Living Standards designed to help people picture the lifestyle they want when they retire – and understand the cost – has been launched
Thomas Cook staff miss out on full pension benefits
Stuart Price from Quantum Advisory comments on Thomas Cook staff missing out on full pension benefits
PTL and Aegon comment on PLSA retirement guidance
PTL and Aegon comment on PLSA retirement living standards guidance launched today at the annual PLSA conference in Manchester.

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.