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Treasury Sipp rules are dividing industry

The Treasury’s consultation on Sipp regulation is splitting opinion in the pension industry.

Some advisers and providers say it is an anomaly to have stakeholder and personal pensions regulated when Sipps are not.

Others claim that regulating the Sipp wrapper would not deter investors from putting alternative unregulated investments in Sipps and would saddle providers with a costly compliance burden.

Concerns have been growing over unregulated prop- erty and niche investment firms targeting the burgeoning Sipp market with what could be unsuitable investments. Some major providers say regulation would prevent rogue individuals setting up shell schemes where consumers would have no comeback if assets vanished.

The Treasury indicates it is the Sipp wrapper and not investments held in it that will be the subject of the consultation.

Hargreaves Lansdown head of pensions Tom McPhail says: “It looks anomalous to have two of the three main indiv- idual pension products regulated and more esoteric unregulated investments going into Sipps will strengthen calls for regulation.”

A Treasury spokesman says: “One of the options in this consultation will be to introduce a new FSA-regulated activity of establishing and operat- ing a pension scheme. This could have the effect of bringing Sipps, and all other non-occupational pension sch- emes, within the scope of FSA regulation.”


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