FSA sends out stern warning to advisers on Sipps
The Financial Services Authority (FSA) has warned financial advisers not to kis-sell Self Invested Personal Pensions (Sipps) as part of the pension advice they provide to consumers.
The FSA has examined some of the promotional materials that have been produced to market the pensions and found worries with a “significant number” of them.
Advisers have been specifically warned to provide fair pension advice and not to recommend Sipp products that may attract large commission payments.
This warning was made on the back of press reports that stated that many people were being persuaded to change their pension arrangements and invest in a Sipp when they did not need to.
The suggestion has been that advisers have done this to gain commission on the sale of certain products, rather than providing the best pension advice available.
“Some insurance company Sipps can operate by paying a quite substantial commission upfront which is deducted from the customer’s investment fund,” said Tom McPhail of pension adviser Hargreaves Lansdown.
The FSA was adamant in its insistence that “pension advice given to transfer into a Sipp is suitable, reflects the customer’s needs, priorities and circumstances, and is not influenced in any way by commission payments.”