A new kitemark-style approval scheme for investments capable of being held in self-invested personal pension schemes (SIPPs) has been launched by SIPP Investment Platform Limited, a company set up by UK-based consultancy firms Intelligent Partnership and Enhance Support Solutions.
The service will give SIPP providers and independent financial advisors (IFAs) an objective product governance audit trail as part of the distribution of these sort of investments.
Speaking exclusively to OPP this week, Intelligent Partnership managing director Guy Tolhurst said that the new service has been set up in response to a growing wave of concerns from the UK’s government-backed regulator, the Financial Services Authority (FSA).
According to Tolhurst, “there are genuine concerns that advisors have been promoting certain esoteric investments to an unsuitable audience and SIPPs have been targeted as easy money to go after.”
“Many of these esoteric investments are unregulated, meaning the product providers and promoters may be outside of the scope of the FSA.” says Tolhurst.
“As well as monitoring the promoters the FSA is now focusing in on the SIPP Providers, who are very much within their scope, and they are being asked to carry out more detailed and investigative due diligence on the products that they are accepting, as well as ensuring they are reviewed on an on-going basis.”
“For a SIPP Provider it used to be a question of can this product be held with a SIPP under HMRC guidelines without attracting a tax charge whereas now the remit has extended to monitoring the appropriateness of what is transacted through their SIPP.”
And, according to Intelligent Partnership director Peter Robinson, “SIPP providers now have to take more responsibility for product governance … it is no longer acceptable just to verify if an asset is capable of being held within a SIPP under HMRC guidelines.” This is where The SIPP Investment Platform service comes in. “Contracting directly with the SIPP providers, we will carry out detailed due diligence on these products, supporting their own technical and compliance teams with their internal product reviews process,” says Tolhurst.
And “we will compile investment reviews and governance reports that will include our own research, opinions and considerations for the SIPP Provider,” he adds. “We will not, however, be recommending investments or assessing their suitability for investors. The products will be reviewed and the reports updated on a six-monthly basis”
Gordon Banks, operations director at SIPP Investment Platform adds “once we have completed and compiled our full product governance review, and we are happy to approve the investment, the product in question will be awarded with the company’s SIPP-approved kitemark by way of a licence agreement, renewable in line with the review process.”
“Each report is made available to subscribers within a personalised library on the company website, when downloaded it is given a Unique Identifier Code and is personalised to the subscriber’s company for their own due diligence records and audit trail.”
OPP understands that a SIPP product provider wanting a full “Product Governance Report” will need to pay £2,000 for the report and £895 for the annual review, license and listing on the platform.
“We currently have eight SIPP Providers subscribing to the platform and investment review service,” says Tolhurst, “and there are several more in the pipeline. We also have an advisory panel made up of pension compliance professionals, accountants and lawyers. Where required we can draw on the panel to provide a second or legal opinion on any investment under review”
Guy Tolhurst started Intelligent Partnership in 2007 after eight years of delivering bespoke sales and marketing solutions to international real estate developers, funds, hoteliers and investor groups. The company’s expertise in alternative and pension-based investments means that Intelligent Partnership now raises more than £30million per annum in this sector.