The FCA has been asked by MPs about the repercussions SIPP providers face if they fail to meet the regulator’s due diligence expectations.
MP Frank Field – also the work and pensions select committee chairman – sent a letter to the FCA raising concerns about SIPPs in relation to defined benefit transfers.
The letter states that SIPPs have become the primary channel by unscrupulous advisers to move client pension savings into unsuitable investments.
“Widespread” failings in due diligence and consumer protection were found in the FCA’s review of SIPP operators in 2013/14.
The Financial Services Compensation Scheme (FSCS) has predicted a rise in SIPP compensation claims.
In the letter, the work and pensions select committee asks what powers the FCA has to punish SIPP providers for failure in due diligence and if the FCA is considering a ban of unregulated or non-standard investments from inclusion in SIPPs.