Sipp providers fear FSA wants to make them responsible for suitability of advice

Please see attahced

So, if these FSA "ideas" are necessary for the SiPP market then it must be equally true that wrap providers should check the quality of advice and the suitability of advice re the investments used in wrap pensions (well actually any investment plan or wrap or holding).

Hang on, the life/pension companies offer such a wide range of funds and asset classes these days that actually the risk in a SiPP is actually no different to a straight forward personal pension plan or investment bond.

Logical conclusion - all providers should check the suitability of every piece of business they receive before accepting it.

Hello hello, are we back to the age old conspiracy theory that the FSA (and banks/insurers) would like us all to work for those big institutions regardless of the fact that whilst writing 15% of the business they generate 85% of the problems ???

The only thing teh FSA shoudl insist on is that the firm submitting the business tto teh SIPP provider ahs the correct authorisation for what they are looking to do. i.e. they should check if the they are or are not authorised to undertake occupation pension transfers, then the rest should be down to common sense of the man on the Clapham Omnibus, i.e. a simple duty of care. If you suspect something is out of order you have a moral responsbility to question the introducing adviser and perhaps a legal one, but not a responsinbilioty to check ALL incoming business which would be ludicrous. The FSA need to provide evidence of what their actual concerns ARE to the SIPP provdiers so they can measure it against the sort of introduced business they get and make sure they have systems and controls to identify potential problems. That is very different to expecting the SIPP providers to take responsibilty. the problem is that the F-pack system does not make it clear what the failure of a duty of care might cost a firm and this is a fault of a "principles" rather than "rules" based system, no-one knows where they stand and to some extent as the wind may be vblowing in a diffrrent direction when the dust settles and allowing t=for the fact the F-pack apply things retrospectively with NO 15 year longstop, I'm not surprised the SIPP providers are taking exception to yet anotehr implied threat from the FSA.

Increasingley they seem to be ruling by fear since Hector was allwoed to say "be very afraid" so that whenever you question them, they insert an implied threat if you try something innivotive..... as they don't seem to like change whilst foisting so much on us.

Whatever will the FSA dream up next? This is completely crackers and only a step away from requiring that all providers verify the suitability of any advice given on any product submitted by any intermediary.

That is not what providers are there to do ~ they are there to provide products and any advice given to clients as to the suitability of those products is the responsibility of the adviser. The next thing we'll be seeing is a hindsight review against the product providers. Talk about the lunatics having taken over the asylum. This is bonkers.

This all makes perfect sense, once you realise that the top priority of a regulator is to find things to regulate.

I agree with Phil Castle's comments about 'principle' based regulation.

Trustees' have an unenviable job as it is trying to decide what is acceptable or not. I just saw a company today who is promoting the purchase of agricultural land in the Ukraine. An accpetable SIPP asse, although obviously not all SIPP providers will allow it, but how is a SIPP provider qualified to determine that this is acceptable based on the individual client's overall portfolio and appetite to risk??

You have misunderstood me perhaps (or I have misunderstood your post). Were I a SIPP provider, the sort of investment you mention i.e. land in the Ukraine may well be acceptable and to an extent it should not be for the SIPP provider to question the advice from the adviser who has suggested this asset is held in the SIPP. Perhaps their should just be a clear path for SIPP providers to express their concerns and give a "heads up" that perhaps the FSA might like to look at the advice given by the adviser advising this asset is held. If on the other hand no advice has been sought or given on the asset to be held in the SIPP, then the only obligation on the SIPP provider would be to make it crystal clear to the investor that while they may administer the admin in the SIPP, they accept no responsibility to the client of what THEY ask the SIPP provider to purchase or hold on their behalf.

Ultimately a clear audit trail of who said what to whom is the best way forward to avoid stifling innovation and for me, this is why I keep banging on about the fact the FSA and FOS shoudl encourage the recording of ALL client contact as MP3 or similar sound files so a true record of who said what to whom exists, that way we could return to a sensible balance between "let the buyer beware" and "duties of care of a professional to his/her client" in this day and age a "balance of probabilities decision from somone at the FOS who may have NO legal experience and only refers back to someone with some if their decision is question is unacceptable.