FSA restarts SIPP disclosure consultation after industry pressure

The Financial Services Authority (FSA) will conduct another consultation into SIPP charge disclosure after an industry backlash.

In February, the FSA published a consultation on SIPP disclosure, CP 11/03.

In it, the regulator proposed placing a requirement on SIPP providers to create key feature illustrations (KFIs) and disclose whether or not they receive interest on cash accounts within their products.

SIPPs are currently exempt from these requirements, and many providers claim it would be impossible to create a standardised format for SIPP disclosure due to the complicated nature of some vehicles.

In light of the industry responses to its consultation, the FSA today published a response in which it promised to consult on a revised set of proposals in future.

Under its original proposals, the FSA suggested SIPP providers would still be exempt from producing reduction in yield (RIY) and charge information on some assets such as commercial property, commodities, ETFs and shares.

The estimated at the time of its original proposals that the changes would have cost SIPP operators around £120,000 per year extra with some costs being passed down to consumers.

John Moret, director of MoreToSIPPs, said: "The FSA has taken six months to tell us it is not sure what we should do.

"The current regulatory regime for SIPPs is not fit. By shoehorning SIPPs into a regulatory regime designed for stakeholder pensions and personal pension schemes the FSA created a Pandora's box."