FCA Interest Crackdown Biggest Threat to SIPP Providers?
Not if you are nimble, bespoke and up front.
A recent article in Professional Adviser on the FCA crackdown on SIPP providers may well strike Trump-like terror as, according to mainstream thought, SIPP providers are going to be extremely challenged by the new capital requirements imposed by the FCA on 1 September. Especially for a bespoke provider such as TPSG, since we provide a full SIPP capable of holding non-standard assets, so as to be non-viable in the main.
The FCA beef is with companies whose business model relies on taking a share of investment return (bank deposit interest) on the SIPP capital. Understandably the FCA’s (finally) taking a rather dim view of the industry ‘creaming’ bank interest off client’s earned interest, and is implementing measures to stop it, leaving many providers, big and small, in jeopardy as they ponder how to meet capital requirements when this extra income stream is dammed.
Refreshingly, (and contrary to our use of outmoded acronyms) we operate a WYSIWYG approach. We operate an ethical pricing policy, which does not take a share of investment return or any other kind of commission. Put simply, there are no hidden charges; all our fees are, and have always been, menu based and we are jolly proud of the innovative, swift and individual service we offer in return.
Because we’ve only ever charged for what we do and have never earned income off the back of the performance of any client’s investment, bank account interest or other, our business model does not rely on this to help cope with Capital Adequacy requirements. So the good news is that despite the ongoing vanillarisation of the SIPP market, there’s still opportunity for those who want a full SIPP with all the bells and whistles that should come with them (but rarely do). Furthermore in contrast to many SIPP providers, large and small, who might well be sweating about this latest FCA intervention, we welcome it from an ethical point of view but also, being adequately capitalised, from the perspective of the strength of our financial position.
Our flexible SIPP products are some of the best on the block for looking after your clients’ long-term future. If you’d like to hear more about how they are also sustainable, (and won’t add a sneaky service charge to your client’s restaurant bill) get in touch.