FCA has published a portfolio letter to SIPP operators which sets out its view of the key harms in the SIPP operator portfolio, its expectation as to how firms should mitigate these harms, and how its expectations in these areas will be heightened by the incoming Consumer Duty.
The concerns identified are long-standing, and include:
- Firm failures causing disruption of service for consumers or transferring additional costs to them (including potentially unauthorised payment charges if a scheme is wound up and assets given to members).
- Consumers not receiving fair redress when it is due (or not receiving it in a timely manner), particularly when firms have failed to conduct adequate due diligence.
- Pension scams and fraud, as well as consumers being allowed to make investments which should not be accepted in their SIPP, including non-standard assets which fail or become illiquid and lose all or most value.
FCA remains focused on the primary means of mitigation set out in its previous portfolio letter of December 2020, namely financial resources, complaints handling, due diligence and product governance. It is also now focussing on systems and data.