Stopping scammers, property investment, Brexit and workplace pensions
Elaine Turtle, director, DP Pensions found a number of key themes resonated with her at the recent AMPS Conference
Over 80 SIPP and SSAS industry participants came together at the end of May at the AMPS Annual Conference. I have been attending this event for many years and this one didn’t fail to impress. With so much change in the sector, concerns over investors being scammed, it is heartwarming to see everyone come together to hear not only the technical talks but those aiming to make the sector a better place for providers, advisers and consumers.
For me there were 5 key themes that ran through the day:
Stopping the scammers
In Zachary Gallagher’s chairman’s address he provided an update on the work being undertaken between the Financial Conduct Authority (FCA) and AMPS. Including the fact that AMPS has been invited to attend a number of meetings with them. There has also been engagement with The Pensions Regulator (tPR) which can only be a good thing for the industry as we work towards cutting off the scammers and educating consumers on the risks and what to look for. One area that has been discussed is the potential to reinstate the role of Pensioneer Trustee which would go a long way towards stopping the scammers and improving the recently distorted view of SSAS, this was also echoed by Margaret Snowdon OBE, chair of the Pensions Liberation Industry Group (PLIG). She raised a number of really interesting points including the fact that we have to protect consumers, but it is so difficult to share information on potential scams, due to the risk of litigation that it actually helps the fraudsters get away with it. Education is needed at a grass roots level, perhaps encouraging the soap operas to highlight stories would help. Margaret believes that we need to be tougher and cleverer when dealing with the scammers.
Martin Tilley of Dentons Pension Management also covered scamming and how we will never get rid of them as individuals are driven by greed, naivety and a lack of knowledge. Banning cold calling is only a temporary fix – scammers will move overseas to find a way around this. He highlighted that there is still demand for SSAS in the adviser industry but there needs to be better regulation.
From the inception of SIPPs and SSAS, they have been a popular solution for those that wish to invest in commercial property. Currently one of the issues within the sector is the Land and Buildings Transaction Tax (LBTT) applying to Scottish properties. Fergus McDiarmid from Morton Fraser Lawyers discussed the tax barriers on transferring a property domiciled in Scotland between providers that is currently happening. LBTT now say that stamp duty must be paid on an in-specie transfer from one provider to another provider. That it could discourage those with a Scottish property in their scheme to transfer to a provider who may be better suited to them which is not good for the client or adviser, or the industry and is in conflict with the FCA’s competition objectives. There is further guidance from Revenue Scotland due shortly and it will be interesting to see if they cover off the potential consumer detriment.
Improving consumer outcomes
Lucy Forgie from the Association of British Insurers (ABI) gave an update on the industry wide project to improve pension and investment transfers and re-registrations. With consumer appetite for transfers continuing to grow, this is an area of great concern to the wider pension sector, not just to SIPP and SSAS. She feels that there are vested interests and the desire to improve the transfer process varies between the receiving and receding schemes. The ABI are wary of the risk of inadvertently facilitating scams if an imposed response time does not allow for a full due diligence process.
The Workplace ISA
Michael Johnson, research fellow at the Centre for Policy Studies, is always a challenging speaker and he certainly lived up to his reputation at the event. He demonstrated how he believes the industry could create a simple retirement saving option available to everyone, taking away the complexities that are currently causing a lot of confusion for consumers. He firmly believes that “tax relief is complete nonsense” and that “pensions are finished”, perhaps his thoughts are not agreed with by the majority of the industry or the audience. He talked through his proposed next steps for the LISA, including the introduction of the workplace ISA (WISA) to counter auto-enrolment opt-out risk.
Roger Berry of Concept Group spoke on the impact of Brexit on QROPS along with the recent tax charge that has been introduced, there are also some other rules around residency that people may not be aware of. He believes QROPS are dying out, the £60-65 million in tax revenue the Government thought they would get from them won’t happen and that as the QROPS door is closing, the overseas SIPP door is opening but these are not subject to UK regulations, so an area to watch with care.
The final external speaker was Diego Zuluaga of the Institute of Economic Affairs who spoke about Brexit and how we should remain positive. His view is that the UK has benefitted from being inside the UK for 40 years but it can do well outside it too. Unlike other EU countries, Britain is still growing strongly and will see population expansion in the coming decades. Given the size of the EU-UK trade relationship, a good deal is central to medium-term growth for both sides. But long-term trajectory will be determined by domestic economic policy and that is the opportunity of Brexit.
Overall, a really excellent day full of high quality speakers and encouraging debate around the future of pensions and the UK economy.
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