10 Nov Some Sipp Providers May End Up Facing Tougher Due Diligence

The FSA has recently released a statement claiming that Sipp providers who offer more esoteric assets could wind up facing high capital adequacy requirements in addition to more difficult due diligence requirements. Head of investment policy at the FSA, Peter Smith, has claimed that capital adequacy could be linked to whether providers offered a full Sipp proposition. He commented "Sipp providers need to ask what service they are going to offer. If I have to wind myself down as a Sipp and I have been operating purely in the esoteric end of the market then what does that mean for the people whose pensions I am holding ? "I think the Sipp operator has choices to make about the assets they will administer within the Sipps they are running. Their choice should be based upon some assessment of what is sensible for the customer base they are dealing with and I think they need to think through what that implies for them in terms of due diligence."