Adviser due diligence

Non standard assets held within SIPPs often hit the headlines and the FCA action relating to Park First is a case in point.

This asset, accepted by several SIPP providers, whilst not yet deemed as “toxic”, is now likely to create administrative problems as it is not what it was purported to be and in most cases will now need to be unwound.

Dentons was not amongst the accepters of this asset, although we were asked to accept it by several prospective clients. It is worth remembering that the quality of a SIPP provider’s due diligence and asset acceptance process is key to its own business risk management and its ability to monitor its administrative responsibilities.

Whilst regulated advisers may not have been involved with this type of 'non standard' asset, it is important that when advisers and paraplanners carry out their due diligence on SIPP providers, they ask if the provider has any exposure to 'non standard' assets such as these.
Holding a large number of 'non standard' assets is not a bad sign as long as those assets have been thoroughly reviewed and meet a robust acceptance process. 

Martin Tilley, Director of Technical Services, emphasises this in his article: not all non-standard assets are toxic.