FCA sets sights on non-standard investment advice

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The FCA has begun collecting information from Sipp providers in an attempt to identify which advisers are placing clients in non-standard investments.

From September 2016, Sipp firms will have to hold capital based on assets under administration, with an additional allowance related to the proportion of non-standard assets held.

An FCA spokeswoman confirms the regulator has this month asked firms to hold an audit of the non-standard assets they hold, including listing how they are distributed. She says the exercise will include information on authorised advisers, unregulated advisers or directly ­executed business.

Chase De Vere head of com­munications Patrick Connolly says: “I would be very surprised if there were many advisers selling these products at all any more, from the perspective of whether they are right for the clients but also of the risk of the advisers recommending them as well.

“It would seem logical that these days it is the unregulated market selling them.”

Dentons director of technical ser­vices Martin Tilley says: “The data could be used not only to identify rogue advisers but also to highlight Sipp operators’ controls and how well they have adhered to previous thematic review guidelines.”

But he warns the information will not give a complete view of the non-standard market.

He says: “Once Sipp acceptance crit­eria for assets began to tighten, we noticed the same promoters of non-standard and unregulated investments targeting SSAS, which do not feature in this exercise.”

The industry is still divided over whether to treat commercial property as a standard or non standard ­asset, despite FCA guidance published over the summer.