What is clear is that a number of other active Sipp operators have a potential exposure to investments taken on or after that date – and possibly before it. In preparing a report on the Sipp market to be published later this year I estimated that Sipp operators have a potential exposure to more than 10,000 claims with an aggregate value of more than £1bn.
Yet despite all this negativity the Sipp market continues to thrive – no surprise when a separate report from Fintech organisation Origo stated that Sipps accounted for 51 per cent of all transfers through its automated service in 2017 – that is more than £15bn. Despite recent concerns over British Steel transfers and more generally concerning pension transfer advice, it seems certain that the Sipp market will continue to grow.
However, largely that will involve Sipps using mainstream investments. The picture for the more bespoke end of the Sipp market looks far less promising with further consolidation of operators almost inevitable.
The risk that the FSCS decision might open the floodgates to claims against active operators being pursued in the courts is real – which could lead to further collateral damage for the Sipp industry and its brand. That is not something Nigel Lawson would have had in mind when he proposed extending the investment choice for Sipps back in 1989.
John Moret is principal of MoretoSIPPs
