The lack of FSA regulation in the small self-administered scheme (SSAS) market leaves IFAs open to criticism for client neglect, according to Premier Pension Services (PPS).
The FSA has strong guidelines for individual SIPP investment profiling but this detail is lacking for SSAS members, who fall outside of the FSA’s regulation.
PPS says without detailed profiling, many IFAs could find it difficult to keep up to date with SSAS clients' changing needs.
Nigel Manley, head of self-invested pensions at PPS, says: "Why should SSAS members be treated any differently merely because their pension arrangements are under occupational rules and outside of the regulation of the FSA?
“There’s a lack of ongoing attention to the portfolio. The portfolio gets established and then left. Has that member’s attitude to risk as they approach retirement not in fact changed? That would be the area where a member of a SSAS could say ‘these investments were recommended to me 10 years ago’.
"Even allowing for the occasional company loan and direct property purchase the member should be seeking to secure a balanced portfolio that reflects their attitude to investment risk and will accommodate the fact that the scheme may go into income drawdown and operate as such for many years."
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