Treating Customers Fairly

The regulatory regime with regard to Self Invested Personal Pensions (SIPPs)

Dentons Pension Management Limited (Dentons) is Authorised and regulated by the Financial Services Authority (FSA) with its registration number being 461094.

The principal permission granted to Dentons by the FSA is for the establishment, operating and winding up of personal pension schemes and, whilst authorised to control client money, Dentons is not authorised to hold such funds on its own account.

With the FSA’s Treating Customers Fairly (TCF) requirements, advisory firms who are considering using Dentons’s products might wish to have a better understanding of how Dentons discharges its own responsibilities within the TCF arena. These are some of the frequently asked questions seeking details on how Dentons is taking steps to achieve the following:

The quality of systems and controls, administration procedures, T & C regimes and management information:

As a part of the FSA Thematic SIPP Review, Dentons provided the FSA with a considerable amount of information on its operating procedures and management processes. The FSA then carried out a lengthy telephone interview – aimed at verifying and corroborating the detail previously supplied.

The FSA subsequently confirmed that:

The financial strength of the organisation:

The FSA’s Capital Adequacy rules require Dentons to submit quarterly financial summaries. In this regard, Dentons’s funding situation is that it has consistently held reserves that are very substantially higher than that required by the FSA.

How much actual experience the principals have in administering SIPPs:

The three advising Directors average over 20 years service with Dentons and have been actively involved in the creation and administration of SIPPs from their inception in 1989.

How SIPP accounts are administered and the segregation of duties:

Dentons SIPP administration is principally based upon the underlying experience of its Pension Consultants with each having the support of experienced administrators. The consultants have an average of 19 years service with Dentons and, collectively, hold qualifications from a number of Professional bodies – including the Institute of Actuaries, the Pensions Management Institute and the Chartered Insurance Institute. Each Consultant is responsible for a portfolio of accounts and is supported by a dedicated team of administrators.

How SIPP providers interact with advisory firms that introduce clients:

Consultants are encouraged to develop professional relationships with introducing firms and to gain an in-depth understanding of their requirements and are always available to respond to, and seek solutions, to issues, problems and queries that introducers might have.

How SIPP operators manage potential conflicts of interest where they or associated firms also give advice:

Dentons clients come predominantly from Independent Financial Advisers (IFAs) with it being Dentons’s philosophy that advice should come from the IFAs – thus avoiding potential conflicts of interest.

The extent to which firms are embedding TCF and how they are applying TCF to SIPP administration:

The Dentons Board of Directors have long regarded TCF as a priority and every effort is made to cascade this down through line management and Consultants, on to administrators and secretaries, to ensure that everyone understands the fundamental requirements of TCF and its application to the operation of its SIPPs.

The quality of client communications, including illustrations, disclosure and transparency of charges:

Dentons has an experienced review team who continually monitor client documentation, illustrations, disclosure and procedures to ensure their accuracy and technical validity. All product literature is independently reviewed to ensure clarity and accuracy of the content – and without the use of industry ‘jargon’.

How SIPP operators combat fraud and money laundering:

With Dentons, the underlying key to the prevention of fraud is that the SIPP holder must be a joint signatory to any payment made from their account. Dentons is unable to remove funds upon its own authority. With regard to anti-money laundering processes, Dentons follow industry guidelines as set out by the Joint Money Laundering Steering Group and also work with introducing intermediaries to ensure that the identity of clients are correctly confirmed.

The Firm’s structure with regard to Trust arrangements.

Dentons operates its SIPPs under a ‘Master Trust’ arrangement with each individual SIPP holder being appointed as a Trustee of a sub-Trust with this ring-fencing the individual’s SIPP assets from other plans and from Dentons itself.