Wrap Ascentric has put a hold on all new unregulated collective investment schemes (Ucis) being placed in its Sipp, following the Financial Services Authority’s (FSA) recent thematic review into the sector.
In October the regulator published the results of a thematic review into the Sipp market provider, which found an increase in the number of ‘non-standard’ investments held by some Sipp operators and inadequate controls over these investments.
It called on Sipp providers to introduce enhanced procedures for dealing with Ucis, and to review their due diligence processes.
Ascentric chief executive Hugo Thorman (pictured) said that in the wake of the FSA findings, the wrap would not accept any new Ucis business into its own Sipp and was conducting a review into whether it would accept Ucis in the future.
‘We are having a close look at it,’ he said. ‘We looked at the FSA’s paper and what it said about Ucis and decided we needed to stop and work out what was the best way to do this. We do have other Sipps on our platform, so of course it is their choice whether they allow Ucis or not. We don’t know the answer yet. We have to make a judgement.’
Thorman said he was wary of upsetting advisers who had already decided on the suitability of Ucis investments and could feel Ascentric was questioning the quality of their advice, but added that continuing to allow Ucis would mean a significant investment in systems and processes.