Let's face the music and.......
Well you can dance if you want to (more running man than rumba myself) but I think as an industry we can come up with a more constructive response to the FSA's findings on "non-relationship-managed" or small SIPP operators.
For me it's important for providers to react in the right way largely because of what it's taken to get where we are. The SIPP industry has emerged from the well known pensions horror stories of the past decade to be a much needed success in an industry that has fallen from favour in many consumers affections.
Because of this providers as custodians of this shining light should avoid the obvious knee jerk reaction of citing FSA meddling and show their house to be in order or make steps to right any wrongs.
Playing Devils Advocate for a second one could go as far as to say that an FSA investigation is well past due given recent SIPP practices making the news for some allegedly unsavoury reasons. This isn't meant as a smug snipe at those involved because I don't know the full circumstances but let's remember that Joe Public Consumer will read the same headlines we do and expect such an industry to be adequately regulated.
On the whole the feedback given by the FSA all seems to be standard procedural issues that most firms will be doing. A commitment to TCF, monitoring all service standards and understanding the provider's relationship with the firm that introduces the business appears dare I say it as common sense, given that FSA regulation has been with us for well over 2 years.
An interesting theme we picked up on is the fact that while the FSA acknowledge that the SIPP provider in most cases will not give advice, that does not mean they can wash their hands completely if the SIPP and the underlying assets are found to be flagrantly unsuitable for the client. For example if a SIPP provider received clients with an average fund value of say £20K from one adviser the FSA would expect that provider to be aware, review and perhaps even remedy that situation.
This is interesting because a number of SIPP providers both big and small will have started life as a SSAS administrator and operated without the same degree of regulation as they find themselves in today. Culturally this is very much a different animal when the majority of a firms experience is in a non-FSA regulated space.
So our point of view is that any issues are unrelated to provider size and this exercise by the FSA is welcome to promote the good standards that exist in our industry and help root out the bad.