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Defaqto warns advisers facing more fines as transfer review continues

Defaqto is warning that small providers are likely to come under pressure from the findings of the FSA’s review into small Sipp operators in 2010 and advisers will face further fines as the pension switching review continues.

The firm’s latest retirement savings and income report says that the full effects of FSA reviews of pension transfers and Sipp operators have yet to be felt.

Wealth management consultant Matthew Ward says: “Smaller providers are likely to come under pressure from the findings of the FSA’s review of Sipp operators while there will inevitably be more fines issued by the regulator to IFAs as the suitability review continues, especially where IFAs lack audit trails for their transfer business.”

Ward says Sipp market players will also be under scrutiny to ensure they are not complicit in enhancing needless transfer activity.

The number of Sipp operators increased to 76 this year from 71 last year but Defaqto predicts the number of players will peak during 2010 and contract from 2010/11 onwards as new providers find it increasingly difficult to gain market share.

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