The FSA needs to do its own work to ensure clients receive good pensions advice following its criticism of adviser firms last week, Skandia says.
Following an FSA report, which suggested some advice firms were unnecessarily switching clients from a personal pension into pricey SIPPs, Skandia says most advisers recognise that SIPP are not suitable for the majority of their clients.
A survey commissioned by Skandia indicated most advisers believe a personal pension offers sufficient investment flexibility for most savers.
The research revealed that around 71% of advisers say less than one in four of their clients would be suitable for a SIPP recommendation.
A further 22% said up to half of their clients might need the flexibility offered by a SIPP, while just 8% thought the product would suit most of their clients.
Skandia says advisers are well placed to help their clients decide which product is best for them, but has called on the FSA to implement a consistent disclosure regime for the two products so advisers can compare costs more easily.
It believes the FSA needs to examine its own rules, as well as adviser and provider processes, to ensure pension savers and their advisers have all the information they need to make a decision.
Nick Bladen, head of marketing and development at Skandia, says: "Our research shows that most financial advisers realise that SIPPs are only appropriate where an individual requires extensive investment flexibility and is prepared to pay the extra costs associated with this flexibility.
"The FSA review demonstrates that there are a minority of advisers who need to tighten up their advice processes and the FSA can help this development by ensuring the regulations surrounding different types of pension contract are consistent."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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From 1 March