Speaking at last week's Henry Stewart conference on SIPPs and retirement options, John Moret, principal of MoretoSIPPs, said the industry's inability to speak with one voice was a concern in the face of FSA scrutiny and well-publicised examples of SIPP abuse.
SIPPs suffered a further double-whammy last week as it was revealed directors of SIPP firm HD Administrators had been arrested on suspicion of fraud; while an overseas bio-fuel venture Sustainable AgroEnergy, used by SIPP investors, was being investigated by the Office of Serious Fraud.
Speaking to Retirement Planner, Moret said: "Unfortunately due to the actions of a few irresponsible people, there is a real danger that the reputation of the whole SIPP market place is tarnished."
Moret said the revelations were "appalling" but unless the SIPP industry came together, the FSA would continue with a "piecemeal" approach to legislation such as upping capital adequacy requirements to a point where small providers would leave the market.
He added there are two issues preventing the industry standing up for itself - the SIPP "identity crisis" and the lack of a central trade body.
He said: "The problem that [volunteer trade body] Association of Member Directed Schemes (AMPS) has got is trying to represent the interest of a very diverse population of providers. At the moment there isn't one body able to do that. It could be that AMPS could up its game. But whether you'll get the support of the likes of [big players] Hargreaves Lansdown, Standard Life and AJ Bell, I don't know."
He continued: "There needs to be a cohesive response and AMPS is in pole position to do that, but there is also Association of British Insurers (ABI) and TISA (Tax Incentivised Savings Association), so there are three trade organisations not necessarily singing from the same hymn sheet. I think it is important on these sorts of issue that they do."
"The problem AMPS has got is historically it represents the smaller [bespoke] end of the market. Arguably that is where the problems have arisen. With the latest issues they're all small players and they wouldn't be members of ABI or TISA. I think AMPS has to take the initiative but it does have to try and get some of the bigger players behind it, but that may upset some of the smaller players."
"It's always difficult to come up with one uniform view and it's probably unachievable. I think what's important is that efforts are made to achieve that by pulling the relevant parties together."
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