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FSA launches crackdown on Sipp/Ucis advice

FSA e14 Building View 480

Sipp providers have welcomed the FSA’s move to investigate advisers who are offering Sipp advice as part of a scheme for clients to invest in high-risk underlying, unregulated investments which are not advised on.

In a recent alert the regulator expressed concern over advisers moving clients’ retirement savings to Sipps which hold wholly or mostly high-risk, unregulated investments such as diamonds, overseas property developments, store pods, forestry and film schemes.

The FSA says that it has secured a variation of some adviser firms’ regulatory permissions to stop them operating in this way.

It says: “The cases we have seen tend to operate under a similar advice model. An introducer will pass customer details to an unregulated firm, which markets an unregulated investment.

“When the customer expresses an interest in the unregulated investment, the customer is introduced to a regulated financial adviser to provide advice on a Sipp capable of holding the unregulated investment.

“The financial adviser does not give advice on the unregulated investment, and says it is only providing advice on a Sipp capable of holding the unregulated investment.

“Sometimes the financial adviser also assists the customer to access monies held in other investments so that the customer is able to invest in the unregulated investment.”

AJ Bell marketing director Billy Mackay says: “The FSA is doing what is expected here and providers should be embracing that.

“Advisers should be responsible for giving advice on the underlying investments and providers are responsible for a certain level of due diligence.

He adds: “A good way of reducing the risks involved would be to have a permitted investment list for Sipps.”

Rowanmoor head of pensions technical services Robert Graves says: “Clearly the regulator is there to protect consumers from detriment or the potential for detriment and that is what it is trying to do here.”

The FSA has called on Sipp providers to report such firms to its whistleblowing team via the following phone number: 020 7066 9200.


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