Request a Demo Today

Dear CEO | Release Date: 12th May 2023

To read a longer summary of this Dear CEO letter, click here.

To access the original FCA document, click here.

Short Summary

The Financial Conduct Authority (FCA) has issued a letter to Self-Invested Personal Pension (SIPP) operators, highlighting the importance of this supervisory portfolio which holds over £205 billion of pension assets for 1.7 million consumers. The letter outlines the FCA’s expectations following their Consumer Investment Strategy and their Business Plans which emphasise a focus on reducing harm and setting higher standards, particularly in anticipation of the new Consumer Duty effective from 31 July 2023.

The FCA raises concerns about several issues within the SIPP operator portfolio, including firm failures, inadequate redress for consumers, and exposure to pension scams and fraudulent investments. These issues are often linked to insufficient due diligence on investments and intermediaries, which can lead to consumers making high-risk investments that may become illiquid.

Specifically, the FCA points out the persistent problem of SIPP operators not performing adequate due diligence, leading to significant consumer harm. It also notes a worrying trend in firms failing to address or resolve these issues proactively, with many consumers still awaiting fair redress. The letter stresses that with the upcoming Consumer Duty, firms are expected to act in good faith and prevent foreseeable harm to their customers, which will require a higher standard of conduct and operational integrity.

Key Actions for SIPP Operators:

This letter serves as a reminder and a directive for SIPP operators to significantly enhance their operational standards and consumer protection practices ahead of the enforcement of the Consumer Duty.

Back to the Dear CEO letter archives.