A Case of "Told You So?"
Anyone with any exposure to the world of Curtis Banks recently will have heard us banging on about the worries of some firms exploiting loopholes in the pension rules, particularly taking unauthorised payments to accelerate the removal of funds from a scheme.
We were not surprised then to read in an article that the FSA have made warning noises about the suitability of this, and have said that it is likely to be in breach of TCF.
It would be easy just to be smug and say "told you so" but it's an important issue. Headlines equating FSA negativity with SIPPs aren't good for our industry, particularly in the wake of all the press generated by the Freedom SIPP debacle. It starts to give the impression that SIPPs are "dodgy products", something the industry as a whole doesn't deserve.
Another worry is over-reaction by the authorities; the "poking an angry bear with a pointy stick scenario" we highlighted before. Unauthorised payments aren't the only thing that concerns me; Scheme Pensions are another area where I'm worried that some firms are pushing the rules too far on what can be taken out. The last thing we want is the regulators deciding that the only forms of drawdown allowed from a SIPP or SSAS are USP and ASP. ASP in particular is very restrictive, it's no surprise that the industry is looking at alternatives, but if we push our luck too far it may backfire badly.
It makes me wonder whether our industry should reach its own consensus on what it thinks is OK, rather than waiting for the regulators to decide. Self regulation as a regulatory structure clearly has had its day but the industry influencing debatable practices has to be a positive. Not only can the authorities over-react, they can be slow-moving and this isn't good for the end result either. Having an industry view on what is OK rather than simply waiting to be told off may help our image and prevent things getting out of hand.