Berkeley Burke SIPP Administration has revealed that it has stopped accepting overseas property into its self-invested personal pension (SIPP).
Berkeley Burke said a management decision was taken not to allow overseas property into its SIPP in December of last year. The move became effective on 12 January.
Explaining the decision, Brad Kilbane, head of risk and compliance at the provider, said: "The management team considered the risks involved with this type of investment were higher than our appetite would allow in the current environment."
The firm joins SIPP provider Dentons in suspending investment in overseas property.
Martin Tilley, director of technical services, Dentons, said the provider has not accepted off-plan overseas properties into its SIPPs "for quite a while".
"Past reviews of off plan overseas hotel rooms revealed that several did not get built on time, within budget and those that did failed to achieve either the expected rental and thus investment yields, nor did the projected capital values upon completion materialise," he said.
The Financial Services Authority (FSA) recently issued a warning to advisers who recommend that clients invest in unregulated collective investment schemes such as overseas property in their SIPPs.
The alert states that it has come to the FSA's attention that some financial advisers are giving advice to clients on pension transfers or pension switches without assessing the advantages and disadvantages of investments proposed to be held in the new pension.
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