Self-invested personal pension (SIPP) providers are at risk of financial failure as they rely too heavily on the money made from retained interest - a practice the regulator could soon be clamping down on, according to FinalytiQ.
SIPP providers are currently 'creaming' up to £50m a year in interest from their clients' cash accounts and may struggle to stay afloat without the income, said the firm's founder, Abraham Okusanya. He told the Retirement Planner forum in London on 14 June the issue was particularly pertinent in light of the looming capital adequacy changes, which will require providers to have in place greater cash buffers from 1 September. The Financial Conduct Authority (FCA) introduced greater levels of disclosure of retained interest charges linked to cash accounts after it found last October pro...
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