The FCA has threatened Sipp operators with regulatory action as it prepares to launch a third thematic review into the sector.
The regulator has contacted Sipp operators outlining plans to scrutinise their financial resources, the quality of businesses within schemes, and operational procedures and controls.
In an email sent to providers, seen by Money Marketing, the FCA says: “We now expect all Sipp operators to demonstrate that they are meeting our requirements.
“Where Sipp operators are unable to demonstrate their compliance with regulatory responsibilities and fail to show they have the best interests of consumers at heart, those firms will be subject to further regulatory action.”
An FCA source says: “In 2012 we were not particularly impressed with the industry and there is a growing frustration that we are having to do this again. This is the third thematic review we have done into Sipp operators.
“The bad practice we found in the 2012 review has not been properly cleaned up and there is a lingering concern that some firms are not looking after the interests of consumers.
“We expect Sipp operators to demonstrate they are meeting our requirements. If they are unable to show they are operating in the best interests of consumers we will be taking regulatory action.”
Earlier this week, the FCA published final guidelines for Sipp providers explaining what they need to do to comply with its rules.
The regulator will also reveal final proposals for an overhaul of the capital adequacy regime for Sipp firms by the end of the year.