Your portfolio
“But if someone is giving you
investment advice, then the investment
advice should stop with the individual
market, into what are referred to as
“platform” or “streamlined” SIPPs and giving that advice.”
the bespoke alternatives.
The right tool for the job
Platform SIPPs are stripped down,
Although a number of companies
platform-based vehicles. They have
limited, though extensive, investment have had rulings made against them,
the Carey Pensions judgment is likely
options, but tend to exclude the
mainstay of many bespoke SIPPs,
commercial property. It is in the area
of bespoke products that most of the
exposure to the toxic assets associated
with the complaints are to be found.
The SIPP boom probably didn’t do
much to help the industry, says Claire
Trott, head of pensions strategy at
Technical Connection and chair of
the Association of Member Directed
Pension Schemes (AMPS).
“This led to a blurring of whose
responsibility the investments
are,” says Trott. “SIPP providers
historically asked whether assets can
be valued, but now there will be more
onus on whether they are suitable
investments.”
While there is a need for clarification
about the role of SIPP administrators
in dealing with execution-only
clients, this is an unreasonable
expectation for the majority of those
who receive investment advice.
“You can rightly complain to a
provider if you’ve received a tax charge
for being invested in an inappropriate
investment,” says Trott, explaining that
this is the role of a SIPP administrator.
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[ SIPPs ]
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to have wide-ranging implications for
the market.
It is almost a year since the hearing,
leading some commentators to warn
the ruling will be complex and could
leave many more companies open to
complaints from investors.
This may cast something of a cloud
over the market, but that does not
In a market that has around
£300bn invested, less
than £5bn is thought to be
associated with “toxic assets”,
although that is unlikely to
be of much comfort to the
individuals involved
mean SIPPs are not fit for purpose.
In a market that has around £300bn
invested, less than £5bn is thought
to be associated with “toxic assets”,
although that is unlikely to be of
much comfort to the individuals
involved. Whoever is considered
responsible, it is clear these
investments were unsuitable for
many plan holders who had relatively
small funds and invested them all in a
single high-risk or fraudulent asset.
Clarification won’t necessarily
prevent future frauds, either, says
John Moret, a director of consultancy
MoretoSipps, who has recently seen a
highly sophisticated scheme designed
to liberate tax-free cash early. This
recycled money through a number of
companies to make the investment
appear legitimate.
Just how far, asks Moret, should an
administrator be expected to go in
carrying out due diligence?
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