This passage is taken from Financial Times, where Intelligent Partnership was mentioned. Read the full article here
Complex rules for DIY pensions
A self-invested personal pension (Sipp) is a tax-efficient wrapper for investments, like any other pension. The key difference is that the investments within it are selected and managed by the investor, or their adviser.
Top-end “full service” Sipps can accommodate a much wider investment choice than ordinary personal pensions or low-cost online Sipps. Alternative investment options, including land and commercial property, gold bullion, traded endowment policies and validated carbon credits, hedge funds and derivatives can all be found, alongside conventional bonds, shares, collectives and cash.
Some of these investments, such as gold bars or hectares of timber plantation, can be held directly, which means that investors have no protection from the Financial Ombudsman Service, as the providers are not scrutinised by the financial regulator.
If, however, this type of asset is held in a pooled fund over which investors have no direct control, it becomes known as an unregulated collective investment scheme (UCIS), and comes under the watch of the Financial Services Authority (FSA).
“The name is something of a misnomer, because while the assets are unregulated, the fund itself is regulated by the FSA,” observes Daniel Kiernan, director at the Sipp consultancy Intelligent Partnership.
UCIS funds can only be promoted to sophisticated investors or wealthy individuals who are likely to understand the risks and implications of the investment. But there are concerns that some of these funds are marketed to the wrong audience, and the FSA has fined a number of firms for breaching the rules.
Sipp providers will also not accept “taxable assets” including directly owned UK or overseas residential property or “tangible, moveable property” that can be used personally, including works of art, fine wine, racehorses and cars.
But even here the rules are not completely clear-cut. If taxable assets such as holiday homes or fine wines are held indirectly in a “genuinely diverse commercial vehicle” then they may be acceptable as investments to HM Revenue and Customs.
In the face of the rapid growth of alternative investments over recent years, the FSA has pressed providers to take more responsibility for product governance.