John Moret AKA Mr SIPP warns SIPP providers of impact of Consumer Duty

by | Dec 8, 2022

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Speaking at the AMPs seminar and AGM, SIPP industry veteran John Moret, principal of MoretoSIPPs and chair of Investor in Customers, yesterday warned SIPP providers not to make the mistakes of the past that have plagued the SIPP industry. He was commenting on the potential impact for SIPP providers of the new Consumer Duty requirements.

Drawing on his experience of having worked in various executive and non-executive roles for five different SIPP providers Moret listed a number of areas that SIPP providers needed to consider in preparing their first Consumer Duty report by July 2023 including:

  • Whether it is appropriate to continue with the term “self invested”?
  • The legitimacy of disclaimers
  • The treatment and disclosure of retained interest and other commissions
  • The provision of customer support for “orphan” clients
  • The clarity of information provided on income drawdown and other options at retirement 
  • The identification and support for vulnerable clients

Commenting Moret said: “The SIPP industry paid a heavy price for largely ignoring the implications of the Treating Customers Fairly regime some 15 years ago. Whilst it is fair to say that in the past SIPP providers were not helped by the inertia and misleading comments from the FSA/FCA, and more recently some contentious FOS determinations on areas such as due diligence of investments and advisers, the same is not true of Consumer Duty.


“The FCA have been very clear on their cultural and operational expectations of all financial services companies and it is vitally important that SIPP providers take the opportunity to review their propositions and operations and ensure that they have evidence to support all aspects of their Consumer Duty report. This may well include the results of independent surveys of both staff and customers.

“One important issue for the whole SIPP industry to consider is whether it is responsible to continue to use the description “self invested personal pension (SIPP)” when the majority of clients using this product are not using non-standard investments and are using a financial adviser to manage their investments.

“Also, in the past SIPP and platform providers have derived significant revenues through the retention of a margin on SIPP bank accounts. Those margins became less important when interest rates were very low, but as rates rise, providers will need to think carefully about whether it is appropriate to continue with this approach and if so how they meet the fair value and consumer understanding outcomes that are part of the new Consumer Duty culture.”


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