Sipp providers must clean up their act when it comes to vetting investments for clients, says Clarke Willmott partner Philippa Hann.
At the Pension Debate in London today, Hann argued the judgment against Berkeley Burke – which it is currently appealing - should make Sipp providers stand up and review their due diligence processes.
Hann predicted the judgment will increase the number of complaints the Financial Ombudsman Service has to handle compared to the ones about advisers.
She also pointed out the Berkeley Burke ruling has put Sipp providers in an “unenviable position” and allows the FOS to do act purely on what it wants.
If the hearing was not a judicial review but in a civil court, then Berkeley Burke might have won the case, she said.
Hann also said it will be interesting to see what the Carey Pensions judgment says compared to the Berkeley Burke ruling when it is published.
She recommended Sipp providers must get their contracts in order, know conduct of business rules and understand what good industry practice is in order to minimise any fallout from Berkeley Burke.
Hann added: “It is time for Sipp providers to take responsibility [for vetting investments] as they are not a bucket into which any crap can be poured.
“The problem area is where people have been cold-called by an introducer and go through an execution only action process where they suffer financial damage. Sipps are the gateway to bad investments and they should take responsibility for them.”