The relationship between Self-Invested Personal Pensions (SIPPs) manufacturers and distributors could be negatively impacted by recommendations in the Financial Services Authority's (FSA) thematic review of small SIPP providers should they be adopted in their current form, warns Suffolk Life.

John Moret, marketing director at the firm, raised concerns about the regulatory regime for SIPPs at the Institute of Financial Planning's (IFP) annual conference while considering 'SIPPs from cradle to grave'. He highlighted some of the FSA's good practice examples in relation to these worries, such as the routine recording and reviewing of the type and size of investments recommended by advisers, the identification of anomalous investments, and the request of copies of suitability reports.

"Taken to its logical conclusion these recommendations would appear to imply that a SIPP operator is expected to determine whether the advice given by an adviser is suitable. This seems to be a significant shift in responsibilities which would potentially put a SIPP operator in a difficult if not impossible position - not least because a SIPP operator is rarely in position of all the facts. Many advisers would take exception to an operator acting in this way. I doubt that it is workable and it inevitably will lead to extra costs being incurred by the operator."

Moret added that this seems out of line with providers' expectations of other packaged products, and asked why SIPPs had been singled out.

He said platform providers could also feel the brunt of these recommendations, and questioned whether given the regulatory activity dating back to 2007 regarding SIPPs it is perhaps time that a review of regulatory framework took place.

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