Same old stuff
"Same old stuff" was one piece of feedback I had from a recent blog about the problems inherent with non-standard investments in SIPPs; the general tone being that I should be more positive.
Well, there are lots of positive things to say about SIPPs: flexibility, transparency, quality of service etc automatically jump out and more often than not I am the first to sing their praises. I'm making no apologies though about returning to the same old stuff, as I am now reading that the Serious Fraud Office and seven other agencies are joining forces against pension fraud, much of which is said to be centred on SIPPs.
Leaving aside the fact that I didn't realise there were that many agencies out there, my main thought on reading these articles is how on earth did it come to this? How have we gone from the once green and pleasant land of the SIPP space and the aforementioned positives to being associated with far darker words like Fraud, Dodgy and Joint Taskforce? This wasn't part of the plan was it?
The latest articles are covering exactly the types of investments mentioned in my last blog - biofuel investments, overseas property etc - and I'm not the only person who knows what's going wrong at the moment. I have mentioned before the comments we receive along the lines of "if that is your position I will take my business to A, B or C SIPP provider" and I am afraid that is still the case.
I've always thought that if our industry doesn't clean itself up then the regulators would step in and do the job for us. My thinking was that in practice this would mean increased intervention by the FSA, but it seems to have gone to a higher level than that with the SFO and those seven other agencies getting involved. How much further does it need to go before our industry realises that something is going badly wrong and the regulators are going to start coming down on people like a ton of bricks?
I'm fully aware that there are SIPP operators out there who are still accepting esoteric investments with precious little due diligence taking place, aren't they aware of the bigger picture? Or do they take the view that they will just clean up while they can? The bigger more responsible SIPP operators like ourselves have robust due diligence procedures in place and don't do this sort of thing, but there's still a lot of confusion out there on what is acceptable and what isn't.
I'm left wondering what it will take to bring the industry to its senses and realise that unsophisticated investors putting their entire modest pension plan into an unusual investment maybe isn't such a great idea. We have gone from flexibility to fraud so surely we have reached a point where enough is enough and providers either raise their game or play elsewhere.