The FSA is warning that it has concerns about a signif-icant number of Sipp financial promotions in the run-up to regulation.
The regulator undertook a review of Sipp financial promotions in the lead-up to regulation on April 6 and says firms need to take steps to ensure promotions comply with its requirements.
It warns that it will carry out thematic work on Sipp advice if it sees problems in this area after regulation starts.
The FSA is already monitoring advice on Sipps and in a newsletter last week highligh-ted the need to ensure advice on the transfer into a Sipp is suitable, reflects the customer’s needs, priorities and circumstances and is not influenced by commission. It says there will be a list of authorised Sipp providers on its website when regulation starts.
It has had 135 applications for authorisation, 64 new applications and 71 applications from firms already regulated for other activities.
The FSA also reminds adv-isers that initial disclosure documents and the payment menu must be updated before regulation to add new wording about commission.
It says: “We are already monitoring closely the provision of advice on Sipps and are having discussions with a limited number of firms to inform ourselves further of market practices. If we see cause for concern in this area or indeed other aspects of Sipp advice, we will consider focused thematic work”.
Hargreaves Lansdown head of pensions research Tom McPhail says: “This is a shot across the bows from the FSA but should not be a significant cause for concern. We know there are some providers paying high levels of commission on Sipp business but there is also a massive opportunity for advisers in this area.”