A Sipp firm is charging its members a one-off £215 fee for work it has carried out to comply with capital adequacy rules.
In a letter to members, seen by Money Marketing, GPC Sipp managing director Kathryn Taylor says the fee will either be deducted from the Sipp account or have to be paid directly to the company.
Taylor writes: “As a result of, as well as in preparation for, these mandatory changes we have undertaken extensive work on our systems and internal procedures to categorise each and every Sipp member’s asset class and, together with other Sipp providers, we have provided and continue to provide the FCA with increased volumes of data.”
She adds: “I confirm over the past year we have worked tirelessly on our systems and have now completed all the work that is now expected of a Sipp provider to comply with the new changes.”
The FCA’s capital adequacy rules come into force on 1 September and base solvency requirements on the proportion of standard and non-standard assets held by Sipp providers.
MoretoSipps principal John Moret says: “No question that Sipp businesses as a whole are being squeezed. But to impose a charge in the way this appears to be levied, I would have thought a lot of advisers would have baulked at that.”
Syndaxi Chartered Financial Planners managing director Robert Reid agrees there are likely to be objections to paying the fee.
He says: “It would be different if they had found they were underneath what was an acceptable level for capital adequacy and had to deal with it. In this case it looks like they have been told the capital adequacy is likely to be and they have got to achieve it. That is where the key difference is.”
In May, Money Marketing revealed research from consultancy Finalytiq that showed a number of Sipp providers’ business models were unsustainable with Carey Pensions, @Sipp and London & Colonial named as those likely to struggle.
GPC Sipp was unavailable for comment.