/ SIPPs / can have expected their provider to have been watching their back . Many of those who have complained have broken the golden rule of investment – investing heavily in one or a few risky assets – a classic case of placing all your eggs in one basket .
Though FCA rules mean SIPP operators have greater capital adequacy than ever before , insurance can only do so much and Moret ’ s worst-case scenario is likely to result in some companies going to the wall .
The fund may be secure , but anyone whose SIPP operator goes bust will face a long and arduous task to rehome it . Even if it is held on a platform in highly liquid assets , trading costs , market risk and opportunity costs may contribute to material losses . Then there ’ s the stress to consider as well .
Determining whether your SIPP provider has a toxic book or is facing a class action is almost impossible , as the data simply doesn ’ t exist .
The experts recommend asking the provider directly , or via your adviser if you have one , as it isn ’ t something that most firms want to discuss right now .
That is likely to change , says Percival , who believes providers will begin to market their services based on whether their books have a clean bill of health .
They also caution against assuming that all providers – even those with toxic assets – are compromised or endangered .
“ Just as rogue doctors don ’ t mean medicine itself is rotten , so rogue advisers don ’ t make advice rotten ,” says Leggett . “ The same goes for SIPPs .”•
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