In the first of a regular series of blogs exclusively for Sipps Professional, Andrew Roberts, Chairman of the Association of Member-Directed Pension Schemes (AMPS), one of the leading bodies for Sipp Providers, looks at what AMPS is and does and discusses key challenges for the sector.

Andrew Roberts Blogs: The Association of Member-directed Pension Schemes (AMPS) is the rather curiously named trade body for SIPP and SSAS providers. We represent most providers in the market - around 150 - from individual pension trustees to large corporations such as Hargreaves Lansdown. We also welcome business to business companies such as banks, solicitors and software providers. The committee of ten are picked from the membership and donate their time out of their day jobs.

AMPS was formed in 2006 from the merger of the SIPP Provider Group and the Association of Pensioneer Trustees (effectively the SSAS Provider Group). The two distinct groups joined to create a single association as a response to pension simplification which brought in one set of rules for all pension schemes (in theory).
As we now know, the term "member-directed pension schemes" has not exactly become the accepted vernacular for describing SSASs and SIPPs! But on the eve of pension simplification, there was a belief that the technical aspects facing both types of scheme would be similar. The influence of SIPPs becoming regulated products in 2007 soon altered that view.

Our aim is to increase standards in our industry. We run seminars for our members, respond to consultations and encourage members to share experiences. Our enemies are uncertainty and costly changes, all of which end up detracting from good consumer outcomes.

The last two years have been challenging times for the SIPP industry, notably as the regulator started responding to SIPPs becoming a more mainstream product, overlaid with concerns over investment fraud and pension liberation. The culmination of these concerns was the publication of the FSA's thematic review on the SIPP industry followed by proposals for radically increased capital adequacy (not just the academic reported increase in the minimum from £5,000 to £20,000).

We responded strongly against enhanced disclosure and increased capital adequacy proposals not because we think providers should hide costs and run their business on empty, but because we believe there are better ways of achieving what the regulator wants: more transparency and greater consumer protection. These messages are often not visible to those reading through tinted glasses. Getting it wrong can be expensive, for the consumer.
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Over the last few years, people have been choosing to invest pension rights in unregulated investments to such an extent that the regulator concluded that many were being coerced into making investments not suitable for them. Focussing attention on the SIPP providers as a group – rather than the promoters of such investments – has distracted from the obvious solution and created uncertainty and an extra layer of consumer costs.

The correct strategy would be to control the selling of the investments rather than implicate SIPP providers who carry out member instructions in a member-directed pension scheme. Perhaps adopting the member-directed moniker more widely would help everyone understand the responsibilities more clearly, and was not such an odd choice of name after all.

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www.ampsonline.co.uk