Richard Mattison, director at Whitehall Group, told FT Adviser that navigating the complexities of consumer duty and examining the FCA’s proposed changes to Sipp regulation will occupy providers throughout 2025.
In early December, the FCA announced plans to revise the regulatory framework for Sipps, adopting a more “prescriptive” approach. While acknowledging the potential benefits of Sipps in enhancing consumer investment choices when properly managed and targeted, the FCA also flagged ongoing concerns about “pockets of poor practice” within the market.
The regulator stated, “Sipps allow individuals greater control over their pension investments, but regulation hasn’t always kept pace with evolving business models. We’ve also observed cases of mismanagement and consumer losses. Our proposed changes aim to build a framework that enables consumers to purchase a wide range of Sipp products with confidence.”
Mattison noted that the consultation covers critical areas, including illustrations, pension transfers, and administrative processes. He highlighted the debate over the fundamental role of Sipps in the pensions market, questioning the definition of a Sipp.
“In our view, Sipps have traditionally focused on purchasing commercial property, unlike platform-based personal pensions that evolved from traditional insurance products and cater to a broader customer base,” he said.
However, Mattison expressed skepticism about whether these proposed reforms would assist the many clients stranded by Sipp providers now in administration. He emphasized, “Resolving the plight of these individuals should be a higher regulatory priority.”