This article is taken from Professional Adviser, where Intelligent Partnership was featured. Click here to read the original article

The SIPP industry remains divided on alternative investments with 47% of AMPS conference delegates believing they should be restricted to high net worth clients.

Responding to a series of polls posed by Intelligent Partnership the remaining 53% said these investments could be used by anyone.

When asked how investors should access these investments 51% said they should only be available through advisers. The remainder said they could also be accessed on an execution only basis.

The polls showed that despite the FCA’s focus on Unregulated Collective Investments alternative assets still have a role to play in SIPPs.

Almost half (48%) of those polled said alternatives should account for between 10-20% of a portfolio. A further 42% said they should account for less than 10%.

Only 5% said there should be no allocation to these assets while a further 5% said they could account for more than 20% of a SIPP portfolio.

There was a clear interest in increasing regulation in the sector with 41% of delegates saying they wanted to see primary legislation. A further 32% were in favour of self-regulation while 17% said CP12/19 was enough. Over ten per cent (11%) said they didn’t want to see any regulation.

James Hay’s head of technical support Neil MacGillivray expressed surprise at the results: “I was quite comforted to begin with that people are still willing to use alternatives and limited them to no more than 20% of the portfolio,” he said.

“What surprised me though was the appetite for these investments especially in the light of capital adequacy requirements and the some high profile failures of these types of investment. We need to remember that this is someone’s pension and is it right for someone to invest in these things if they don’t have a large pension. I think we need to restrict these assets to high net worth clients.”

Intelligent Partnership’s associate director Dan Kiernan said the results showed alternatives clearly have a role to play in SIPP portfolios.

“The results were interesting and show members want to use alternatives and advisers and SIPP providers also see the sense in using them,” he said.

“However, the issue we face is having good quality products. I think papers like CP12/19 and CP12/33 will make providers and advisers more wary of what products they will use and will check the concentrations of alternative assets in portfolios. I think this will shrink the alternatives market but for the better. We will be able to offer people better quality products which is good news all round.”