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Mattioli Woods earmarks £750k for FSA Sipp cap ad rules

by Alex Steger on Nov 30, 2012 at 08:23

Mattioli Woods earmarks £750k for FSA Sipp cap ad rules

Adviser and Sipp provider Mattioli Woods has revealed it will need to set aside £750,000 to meet the Financial Services Authority’s (FSA) new proposals for increased capital adequacy for Sipp operators.

At the start of November the regulator proposed a hike to the amount of capital a Sipp operator would have to hold, with the absolute minimum increasing from £5,000 to £20,000, and the level of assets under administration also taken into account.

The FSA also proposed there would also be an additional requirement for providers that hold ‘non-standard’ asset types such as unregulated collective investment schemes and commercial property. This is because they will take longer to transfer in a wind-down situation.

Mattioli which houses third party pensions business City Pensions, which in turn operates the Pilgrim Sipp, said: ‘These proposals would not apply to Mattioli Woods' core business but would increase the capital requirement of City Pensions by approximately £750,000, which would be met from the group's existing financial resources.

Mattioli's Sipp arm is also looking to boost the numbers of commercial property assets by offering IFAs to transfer commerical proeprty Sipps without an initial transfer, property purchase or lease fee. 

Mattioli also revealed it had amassed £40 million of assets on its discretionary offering since it launched in August.

Mattioli Woods executive chairman Bob Woods said the firm had strengthened the discretionary team with the recruitment of two investment consultants.

Woods said he was confident the company was ready for the retail distribution review (RDR).

‘I am excited about the opportunities RDR will bring,’ he said. ‘Inevitably, we will see changes to the nature of our investment-related revenues as we move from provider commissions to adviser fees based on assets under advice. I believe the quality of our future earnings will be enhanced by the introduction of adviser fees and discretionary portfolio management.’

1 comment so far. Why not have your say?

Brian Shearing

Nov 30, 2012 at 10:21

An additional £750,000 sounds about right for this SIPP operator. Mattioli Woods is fortunate as it is one of the best capitalised SIPP companies in the UK. I have been through the accounts of most of the SIPP operators in an attempt to identify what impact (if any) the new capital requirements will have on them. The number which will require more capital than they have today is quite large. Some will require more than an additional £1 million.

Expect quite a bit of fall out (more than FSA has predicted) in this market over the next one to two years if FSA's consultation becomes policy (which it usually does). And for those who have the funds available there could be many acquisition opportunities

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