SSAS and Sipps: Should same capital rules apply?

In a guest column for Sipps Professional, Karena Woodall, consultant at Mattioli Woods, discusses the treatment of SSAS and Sipps and if there should be any difference in how they are viewed in regulatory terms. I recently picked up my niece with the intention of dropping her off at Nando’s. She had a friend with her, and whilst my niece got in the car and automatically put on her seat belt, her friend did not. As far as I was concerned, my duty of care and responsibility for both children was the same and, as such, I asked her to put on her seat belt (which she duly did). To me, the fact that one child was my niece and the other was not made no difference. The fact that I was not a relation to the other child did not discourage her from following my safety request (and legal requirement!!).I was reminded of this scenario by a recent client, who approached us regarding a non standard investment strategy that he wished to put into his Sipp. We consider all non-standard investments; however, unfortunately in this case we had to advise the client that the investment strategy he was considering was not acceptable to us.His response?His response was to say that it was okay, he would set up a SSAS instead and we would then be able to accept the non-standard investment strategy. He was a little put out to learn that actually, regardless of whether or not it was a Sipp or a SSAS, our stance was that this particular investment was still one that we would not be willing to consider within any of our schemes.Some providers and professionals have commented that the same level of regulatory control should be applied to SSASs as well as Sipps. This leads to additional thoughts as to whether or not SSASs should also be subject to capital adequacy requirements.I do believe that the providers who accept non-standard investment strategies should take the same view, regardless of whether the receiving vehicle is a Sipp or a SSAS, and regardless of any regulatory control, I believe this is something that many providers adhere to on a self-regulated basis already.By their nature, SSASs are exempt from certain trustee duties. However, SSAS providers that apply the same levels of control to non-standard investment strategies within a SSAS as they do within a Sipp will be the providers that retain the reputation for treating all customers fairly.This particular client notified us that he was going to go to a SSAS provider that did not enforce such controls over where funds can be invested. Whilst there are clients who do not view their pension scheme as a retirement vehicle, but as more of an inconvenience of pension contributions paid in the past, each provider has to treat customers fairly, with the advice process there to guide clients into the most beneficial investment strategy for them. For some clients, non-standards might be the best option, taking into consideration all aspects of their planning, and these clients can, in the main, be accommodated – but do we really want clients who are only looking to get around the rules?

SSAS and Sipps: Should same capital rules apply?

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