The self-invested personal pension (SIPP) market is in a ‘Mexican stand-off' situation with the regulator as it awaits capital adequacy regulation and the outcome of the third thematic review, a provider has said.
Barnett Waddingham head of business development, SIPPs Andy Leggett said waiting for the final word on capital adequacy - which could be released by the Financial Conduct Authority (FCA) before the end of the month - meant the industry was "not moving" at present.
He said mergers and acquisitions had also practically halted due to the regulatory waiting game.
Leggett (pictured) said the third SIPP industry thematic review was focusing on unregulated investments and how to better protect investors.
However, he added: "Concerning cases have been very isolated. The number of investors affected is tiny compared to the millions of SIPPs working well. We need to get to the route of the problem rather than taking a broad brush approach."
He said Barnett Waddingham had a number of investments deemed ‘not standard' but these were mainly commercial property, not unregulated collective investment schemes (UCIS) which have come under increased regulatory scrutiny after a number of failures.
He said parts of the industry had been infiltrated by a "trojan horse" in terms of investments.
"That needs addressing within those particular cases," he said.
Leggett also warned firms not to become so concerned with regulatory demands that the end customer is forgotten.
"We have got so many regulatory concerns going on. They are all important and they all need to be met. But there is still the end customer, advisers and their clients. They want service, technical support and regular contact from people who know what they are doing.
"Some of these things are easily forgotten when there is too much focus on other things. Advisers do really care about that, it is key."
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