Looking up towards the sun through a curved framework

SIPP provider posts list of 'risky' investments

Investment Week

SIPP provider posts list of 'risky' investments

SIPP provider Curtis Banks has published a list of the investments it is least likely to accept into its pensions.

The move comes after increased emphasis from the Financial Services Authority (FSA) on the role of SIPP providers as "gatekeepers" preventing savers investing in inappropriate vehicles.

Steve Hart, business development director at Curtis Banks, said: "We spend our time looking at proposals and then turning them down as being inappropriate.

"We get grumpy because we have spent a lot of senior time on something, and the adviser and client get grumpy because we asked them for loads of information and then turned it down."

The new system of posting a list of investments likely to be refused is an attempt to save time, Hart said.

He added investments on the list are not banned from Curtis Banks SIPPs outright.

If an adviser can demonstrate the appropriateness of an investment for a client, it may be allowed, Hart said.

The list of investments Curtis Banks would refuse as standard, but that are negotiable, are:

  • Overseas hotel rooms
  • Overseas farmland
  • Unquoted "ethical" investments (carbon credits, green oil, overseas trees etc)
  • Solar panels and wind turbines
  • "Hot pods" (individual work units)
  • Life settlement funds
  • Third party loans to individuals
  • Third party loans to companies which are unsecured

The guide also contains a list of investments Curtis Banks may consider with extra due diligence, which includes unregulated collective investment schemes (UCIS), offshore bonds and contracts for difference.

Last week research from the Association of Member Directed Pension Schemes (AMPS) suggested SIPP providers have increased their screening of investments in the last year.


Author: Rachel Dalton

10th October 2011