FCA launches Sipp consultation

Sipps absolutely need tougher, clearer standards. Flexibility is brilliant when it gives people genuine choice, but it becomes dangerous when firms use “choice” as an excuse for weak controls, poor due diligence or investments that clients do not fully understand.

A Sipp can be a powerful planning tool. It can also hold someone’s entire retirement pot, so the standard cannot be “we processed the paperwork”. Providers need to know what sits inside the pension, protect client money properly and have robust systems in place if things go wrong.

The FCA has the balance broadly right: do not kill the flexibility that makes Sipps useful, but stop the inconsistency that leaves consumers carrying the risk when a provider fails.

For advisers, this reinforces something simple. A Sipp should never be chosen because it is fashionable, cheap or gives the widest possible investment menu. It should be chosen because it has a clear job to do in the client’s wider retirement plan.