AJ Bell says the FSA could look to extend its thematic review of the Sipp market to platforms.
Last month, the FSA warned it has identified widespread failings among Sipp operators, which risk causing “significant consumer detriment” following a thematic review into the Sipp market.
The review found evidence of poor firm compliance with regulatory requirements, generally poor systems and controls and inadequate controls over the investments held within some Sipps.
As a result of the review’s findings, the FSA will launch a programme of work designed to strengthen capital requirements, disclosure and inflation-adjusted projections for Sipps.
Speaking at The Platforum annual conference in London last week, AJ Bell head of platform marketing Mike Morrison (pictured) said the regulator could be wary of similar concerns arising in the platform market.
Morrison said: “I think there are similarities between the way the Sipp and the platform markets operate and the FSA would probably look to apply the same sort of work to platforms.”
Morrison went on to say many small Sipps that do not sit on platforms will struggle to attract new business.
He said: “There will always be room for the more bespoke Sipps but some of the smaller guys I think will struggle, especially with renewed FSA scrutiny and advisers’ increasing use of platforms.”
More2Sipps principal John Moret says: “There are some similarities between Sipps and platforms and although Sipps do require some more manual work and have less automated processes, it does make sense for the FSA to look to apply some of the scrutiny to platforms.”