Sipp provider trade body the Association of Member-Directed Pension Schemes (AMPS) has called on the Office of Fair Trading (OFT) to review the Financial Services Authority’s (FSA) capital adequacy proposals, warning they are ‘unashamedly discriminatory against small firms’.
AMPS chairman Andrew Roberts (pictured) has written to the OFT, arguing the proposals could see some Sipp providers setting aside up to 200 times as much capital to comply.
The FSA is consulting on plans to increase the minimum capital a Sipp operator should hold from £5,000 to £20,000. It has also proposed that providers holding ‘non-standard’ assets, such as unregulated collective investment schemes and commercial property, be forced to adhere to tougher capital requirements.
Roberts said the plans would force the closure of smaller providers and reduce choice for consumers.
‘It seems the bespoke Sipp industry (which looks after approximately 200,000 consumers) is being singled out for draconian treatment whereas other industries with far greater exposure to consumers are left on an expenditure-based regime,’ he said.
‘The corollary of [the FSA’s] proposals is that it will be much more costly for a smaller provider to take on a new client than it will be for a larger provider to do so,’ he added. ‘This is blatantly anti-competitive.’