The Financial Services Authority has proposed amendments to Sipp disclosure rules in a bid to reduce mis-buying and mis-selling.
The FSA says the changes, in anticipation of the new RDR adviser charging rules, will “encourage a more transparent personal pension scheme market” and “facilitate customers or their advisers making better purchasing decisions”.
A consultation, published today, proposes amending the disclosure rules relevant to key features illustrations for personal pension schemes.
It also seeks to introduce a rule requiring personal pension scheme operators to disclose whether or not they receive commissions and/or retain bank account interest on money held within the scheme. The FSA says this information should be disclosed alongside information about fees, costs and charges payable, and bank interest rates receivable, by the client.
Finally, the regulator is considering amending the disclosure rules that apply to the effect of charges and the reduction in yield information, so that disclosure is required for personal pension schemes.
Moretosipps founder and former Suffolk Life director of marketing John Moret says the rules could lead to “further confusion” and higher costs. He says: “Most of the issues around perceived Sipp mis-selling or mis-buying have arisen not through the lack of clarity around Sipp charges but as a result of a lack of proper regulatory controls on the advice process, coupled in some cases with provider inducements aimed at encouraging transfers.”