SPP pushes stronger SIPP protections, warns of burdens
The self‑invested personal pension market may see tighter consumer safeguards after the Society of Pension Professionals voiced support for the regulator’s proposed reforms, while urging a balanced, risk‑focused approach.
In a response to the consultation titled “Adapting our rules for a changing market: self‑invested personal pensions,” the group highlighted several areas where clarity and practicality are needed.
Association backs tougher rules but warns of cost
The association welcomed the plan to increase due diligence on higher‑risk, unregulated, overseas and unusual third‑party arrangements. It argued that firms should not have to repeat supervision already performed by the regulator.
Clearer definitions, worked examples and tighter alignment with existing frameworks were cited as essential for consistent implementation. The proposed investment categorisation framework received a nod, yet the focus should remain on legitimacy, ownership, administration, custody and safeguarding rather than on individual member suitability.
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“We support the regulator’s ambition to strengthen consumer protection and bring greater consistency to the market, but the new regime must be proportionate and risk‑based,” said Madalena Cain, deputy chair of the Defined Contribution Committee. “We support stronger scrutiny of higher‑risk investments and third parties, while avoiding duplication of existing supervision. Clearer rules, practical guidance and a sensible implementation timetable will be important.”
Cain added that the look‑through reporting requirement could impose “significant and unnecessary burdens” on firms handling assets already under strong regulation.
From a cautious viewpoint, the industry may find that a narrowly targeted oversight model could achieve safety without overwhelming smaller operators. If the regulator hones in on truly risky holdings, the administrative load could stay manageable, allowing resources to be directed toward genuine consumer protection.
The association also called for clearer expectations around valuations, audit requirements, reliance on third‑party data, record‑keeping and monitoring. It suggested that technology, exception reporting and risk‑based sampling should replace manual reviews of large volumes of low‑risk data.
Data standards and reporting also under review
Aberdeen Adviser echoed the call for improved data consistency across the scheme. Its chief executive, Rich Denning, said the regulator was right to address data challenges that affect records, reconciliations and oversight, especially when pension money is held through external providers.
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Denning argued that consistent industry data standards would improve member‑level information and cut the need for bespoke data arrangements between operators and providers. He warned that any new PSM&A regulatory return should be developed with industry input, align where possible with existing CMAR reporting and avoid duplication.
He also noted that policymakers and the sector would benefit from a clearer picture of the market’s size, development, participation and contribution trends, as well as how consumers use these products in retirement planning.
The broader policy implications extend beyond the proposed return, touching on coordination with tax authorities and the Department for Work and Pensions.
Stakeholders anticipate that a balanced approach will protect savers while keeping the market competitive.
