The Loop | July 2021

Your quarterly insight to the pensions world from the team at The Pension Solutions Group and PSG SIPP

Adams v Carey How a seismic court ruling is changing our industry

Inside this issue

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Celebrating ten years at PSG

International SIPP, ‘Standard’ SIPP What’s the difference?

Debunking common transfer myths

and much more...

July 2021

From hot industry buzz, to sizzling revelations of 10 years working at PSG. The mercury’s climbing, so cool down and get yourself in the loop.

In this issue Feature and Insight Self Invested Personal Pensions

Feature and Insight My 10 years at PSG

Industry Insight My 10 year journey of tea & PSG

Feature and Insight International SIPP, ‘Standard’ SIPP – What’s the difference?

Get to know BZB IT

Company update We’re up for an award!

Industry Insight Mythbusters

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PSG SIPP Limited Registered in England and Wales no. 07030395 Registered Office: The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA is authorised and regulated by the Financial Conduct Authority (register number 514654). | The Pension Solutions Group Limited Registered in England and Wales no.

06683561 Registered Office: The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA. | The PSG Trust Company Limited Registered in England and Wales no. 06289058 The Coach House, Box House, Bath Road, Box, Corsham, Wiltshire, SN13 8AA.

Hello and welcome to the fourth edition of the Loop.

This month our magazine will give you a flavour of what it’s like to be a fish in the goldfish bowl of the Financial Conduct Authority. There’s never a quiet period when it comes to regulation, but the last eighteen months plus have been particularly intense for SIPP Operators.

It is partly luck and partly design that we have an exemplary record with the regulator, but this does not mean that the time we spend dealing with information requests, answering questions and responding to rapidly changing legislation is anything less than a full time job for more than one trained and experienced technician.

It’s not an exaggeration to say that the attention is so intense, it’s hard to find the time to actually run the company.

But this got me thinking about the other theme that I hope comes across in this edition; that of the importance of retaining your expertise. With the right recruitment and training policies in place, any company, even those that don’t have deep pockets, can equip themselves with some smart cookies and get them looking after all that important stuff that needs looking after. It’s retaining that expertise that’s key. Understanding that investment and support is ongoing, not just a means to an end.

Duncan Parsons CEO, TPSG & PSG SIPP Limited

Any company can equip themselves with some smart cookies, it’s retaining that expertise that’s key.

This year marks ten years of service for two of our brightest, including our COO. Where we’d be, or how much harder dealing with the regulator would be without them, doesn’t bear thinking about.

THE LOOP | JULY 2021

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Feature and Insight

Self Invested Personal Pensions

By Wendy Poynton Senior Compliance Executive Wendy@psgsipp.co.uk

Will the Adams v Carey case be the point at which SIPP clients are absolved of all responsibilities for the decisions they make?

Wendy Poynton looks at the seismic court ruling and assesses possible future tremors.

From the moment Self Invested Personal Pensions (SIPPs) fell under the remit of the then Financial Services Authority, they have been on a oneway journey to being anything but self-invested.

If we trace SIPPs back to their roots, we see a sophisticated pension option for those looking to seize control of how their money was invested. To a degree, their relative complexity, compared with say, the standard offthe-shelf Personal Pension, provided a healthy degree of self-regulation.

Companies establishing SIPPs tended not to market them to the masses.

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A fast and bumpy ride, that I don’t think anyone in the industry has enjoyed, has brought us all to a point where the once reassuringly welldefined lines between provision and operation of a SIPP, and the advice to join one and where to invest, have become blurred to the point that no one really knows where they are anymore, or even if they are there at all.

This creep of the responsibility of advice, not away from advisers, but rather reaching further out to envelop SIPP Operators, has been an issue in the industry for some time, but recent events are crystallising matters and taking things much further.

This topic is, of course, broad and multifaceted. However, it is perhaps best encapsulated by the recent Adams v Carey case, at the Court of Appeal, which may now move onto the Supreme Court, if Carey is given leave to appeal. We can zoom in a little closer still and focus on something the judge said during the appeal case.

Something that may set the tone for the foreseeable future and, more urgently, may have been the liberal application of grease to the floodgates.

“ Consumers should be protected against their own folly” – The judge at the Adams v Carey case

The judge said this; “Consumers should be protected against their own folly”.

To borrow some non-compliance terminology, that is a potential game changer. For one thing, Claims Management Companies are already advertising for clients invested through SIPPs to explore the opportunities for claims of mis-selling.

We don’t necessarily disagree with the judge, after all, despite being watered down over the years, SIPPs can still be a heady brew, and clients can’t be expected to become pensions experts.

It ought not be unreasonable for consumers to expect those permitted to dispense advice, to do so with their client’s best interests foremost in their mind. But, such sentiments could well pave the way for a slew of new claims with varying degrees of creditability, and that’s only going to be compounded by the ambulance chasers. However, the fact remains that SIPP Operators are not advisers.

the case with Adams Vs Carey, but just because no one is going to have any kind of appetite for anything but the blandest of standard investments.

However, even then, such a ruling could leave a SIPP Operator exposed, should that ultra-safe investment merely not perform to the standard desired by the client.

If you are one of our valued introducers reading this, you may already have felt the impact of this court ruling through our dealings with you and your clients.

As a responsible SIPP Operator, we will always pay close attention to which way the regulatory wind is blowing and make the necessary changes to our systems and protocols. One related change we’ve needed to make recently is around the status of a client if they are being advised by an overseas adviser. Such clients now need to be deemed to be unadvised. In addition to this, if the firm giving advice is not regulated by the FCA, then in the eyes of the FCA, that firm is an unregulated In light of this hostile and fluid introducer. It doesn’t matter whether situation, how can any SIPP Operator they are regulated in their own now do anything other than tighten its jurisdiction. These issues compound already firm grip on which investments the burden of increasing responsibility it permits in a SIPP? Furthermore, how on the part of SIPP Operators, for secure can any SIPP Operator feel even where and how a client decides to after doing that? Also, what are the invest their pension fund. implications for commercial viability when SIPP Operators start rejecting In other words, while the ability to huge swathes of investments, including distance ourselves from the advice those which, on the face of it, meet the process has been greatly eroded, definition of a standard investment? there would normally be a recognised Not because they are the kind of thing adviser in play to help ensure there that probably ought to at least raise is an audit trail of advice, and issuing an eyebrow, as some may argue is of appropriate risk warnings, prior to

us receiving the instruction to make the investment. Now, where a client’s adviser is outside of FCA jurisdiction, their involvement in the advice process will simply not be recognised and the full burden of any kind of appropriate testing, will fall to us. It therefore follows, that so will any subsequent need to provide compensation, in the event of an upheld complaint.

Because of this, we are making necessary changes to our Investment Form, which clients need to complete, and we will be rolling out a new investment policy, which will provide guidance to advisers, and their clients, on the type of investments we will consider. In addition, there will also be a new declaration of understanding which will need to be completed each time a client invests in a structured product. All investments remain at our ultimate discretion, even if the investment meets the definition of a standard investment.

Thankfully, we run a highly compliant operation and invest huge amounts of time and effort on making sure we’re always doing what is right and what is expected of us. We will continue to assess all investment proposals, whether for new or existing clients, with an open mind. Giving us as much advanced notice of the investment as is possible, will certainly help us to manage expectations and limit last minute rejections, but aside from that, and at least until things become clearer, we have no choice but to further tighten our due diligence criteria.

THE LOOP | JULY 2021

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Feature and Insight

My years at PSG 6

We are investing an appropriate amount of time into building a strong Management team, where we see our next generation of leaders.

By Natalie Pike COO, TPSG & PSG SIPP Limited natalie@tpsg.co.uk

This month represents a significant milestone.

A milestone that seems too ridiculous to credit, more than a little like the feeling a parent has when their child turns ten. Yes, it’s a whopping ten years since I joined PSG.

In contrast, PSG has always adapted to fit with the needs of its employees, and in return its employees are challenged and pushed forward in their career.

I never set out to be COO, it just became a natural fit for me and for the company. Right time, right place.

As we continue to grow, the question for us now is, how do we ensure our ethos and culture, which remain precious to us, are not eroded by our growth? The fact that we even The company has changed enormously ask ourselves this question, gets us part of the way, but really, the over this time, almost entirely beyond hardest bit is finding the time to recognition in fact. There were just conceive the creative solutions to six of us when I started, now we have this problem. However, as scant as almost forty employees across TPSG time is, we are investing appropriate and PSGS and with almost constant amounts of it into building a strong recruitment in place, I expect our Management team, where we see numbers to be pushing sixty by the our next generation of leaders. By end of 2022. That would have seemed spending as much time as we can with almost scary ten years ago! them, we should succeed, not just in ensuring they take the culture that we Starting at a small company, for me at are proud of, forward to their teams, least, was a nerve-racking experience. but that they help to contribute to it A huge change from working within so that it remains fit for purpose and the highly corporate environment becomes something they too have an that I was used to, where the path for investment in. progression was already mapped out.

I am not going to lie, nor present everything as some kind of work-based utopia. The road has had its fair share of ups and downs, but what keeps me going is having an environment where I feel valued, respected and included.

A culture that permits and supports my personal growth and understands the link between that and positive outcomes for the company. Also, and just as important, PSG is a place where I really enjoy the time I get to spend with those around me. My colleagues are funny, creative, caring, intelligent people and helping them to benefit from that same mindset that has been lifting me up these last ten years is one of the greatest sources of reward in my job. I could go on, I could talk more about all the ways this company is different in such a positive and unique way, how we value family time etc., but I think you get the picture.

Hopefully you can understand why I have been committed to PSG for ten years now, and yes, I dare say I’ll be sticking around for another ten!

THE LOOP | JULY 2021

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Industry Insight

My Ten year journey of

tea & PSG

By Tracey Faulkner HR Manager tracey@tpsg.co.uk

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I first met Mike Baker (Communications Director) in 2010, whilst working for a training company down the corridor from TPSG. We quickly got chatting over many cups of tea and gradually, I got to know the rest of the team. What a great group of people they were and especially committed to what they were doing. I remember how excited everyone was when they obtained FCA approval, inviting me to join the celebration with a glass of champagne!

Little did I know back then that 10 years after joining the company and many pots of tea later, I would become the Company HR Manager.

I was incredibly excited when Mike approached me to confirm that they were planning on expanding the team and asked if I’d be interested in joining them. Before I knew it, it was my first day in their new, now larger, offices; I had minimal pension experience but was raring to go. The rest as they say is history, a long history of development and amazing opportunities with a company unlike any other I had worked for before.

differently to the vast amount of pension providers out there, going above and beyond in assisting clients in all aspects of their retirement plans.

Over the next 7 years, I received various promotions and continued to build my knowledge across the range of services and products we offer, watching proudly as the company grew and I was able to pass my knowledge onto others. 2018 was the year when I approached the Directors I joined as an Administration Assistant, about the CIPD Human Resources working on SSASs, SIPPs and Exempt Diploma, as I came to realise my skills Property Unit Trusts, providing all and my experience could be put to aspects of support to the Directors, good use. They welcomed this Managers and clients. The development opportunity with open arms as the opportunities and training were incredible, timing was perfect given the growth of everyone was always so supportive the company from 7 to almost 30 and even though I was new to pensions, members of staff. 15 months on, after I never felt as though I was the ‘newbie’. studying hard and becoming more involved with HR work within the I thoroughly enjoyed my role and company, I proudly passed my Level 3 quickly felt part of an amazing team of Diploma in Human Resource Practice professionals who did things just a little and shortly afterwards in June 2020, I

became the HR Manager for both The Pension Solutions Group Limited and PSG SIPP Limited.

Little did I know back then that 10 years after joining the company and many pots of tea later, I would become the Company HR Manager.

Whilst the HR Manager role is a challenging one, I am dedicated to working with the Managers to make TPSG and PSGS the same supportive and friendly place to work, as it was back when I first joined. As we continue to grow, encourage and develop our staff, I can honestly say that I thoroughly enjoy my job!

That just leaves me say I look forward to drinking copious amounts of tea with my colleagues again in the office very soon…. tea anyone?

THE LOOP | JULY 2021

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Feature and Insight

International SIPP, ‘Standard’ SIPP

What’s the difference?

By Chris Perry Operations Manager chris@psgsipp.co.uk

Chris Perry, Operations Manager for PSG SIPP, took some time out of his very busy day to explain the difference between International and ‘Standard’ SIPP’s: International SIPP –or – ‘standard’ SIPP, what’s the difference?

Arguably, there are no differences and certainly we find the moniker ‘International’ can be unhelpful and misleading. From a regulatory perspective, there isn’t really any such thing as an International SIPP. It’s a term coined to identify those clients

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who perhaps now reside overseas but have access to a UK pension fund.

Both ‘types’ of SIPP are UK registered pension schemes, both are FCA regulated, and both are subject to the same rules in regard to investment and drawdown options. In other words, to the consumer, they are the same, so why the distinction?

Some will tell you it’s a marketing ploy – slap the ‘international’ tag on it and raise your fees by 50%. The reality couldn’t be further from the truth, certainly not here at PSG SIPP. I can’t deny as a pension vehicle, the technical capabilities of an international SIPP aren’t much different than their UK resident counterparts, but lift the bonnet and there’s a few subtle, but crucial differences, for example;

Jumping on a Zoom call late at night to talk through an issue with a client in Australia?

We’ve done it.

Accessibility

Complexity

Most UK SIPP Operators won’t even think about accepting a client resident outside of the UK into one of their SIPPs ; it’s way too far outside of their comfort zone. At PSG SIPP we will consider advised non-UK residents, whilst adhering to the strictest compliance and regulatory standards.

Just because someone doesn’t live in the UK anymore, why should they lose access to a secure, UK regulated, well run pension scheme?

International SIPPs come with additional layers of complexity that aren’t part of the ‘domestic’ market and therefore aren’t normally tolerated by most UK pension providers. I’m talking about issues around currency flexibility, knowing your stuff on dual taxation agreements and FX payments. These are just a few of the technical extras exclusive to dealing with a UK regulated SIPP that counts overseas clients amongst its membership. Facilitating investments for those clients requires additional knowledge, expertise and experience as well as a slightly different mindset. It’s crucial that we deploy appropriate due diligence before we accept any new SIPP and the subsequent transfer and investment.

Administration Looking after international clients is more onerous than those that still reside in the UK. Many other companies would be put off by the extra legwork involved as well as the different time zones, possible language and cultural barriers to overcome. Early morning call with an adviser based in the Middle East? We’ve done it.

Jumping on a Zoom call late at night to talk through an issue with a client in Australia? We’ve done it. These aren’t problems for us here at PSG SIPP, but I can’t imagine any of our larger competitors doing the same.

For reasons of unwanted additional complexity alone, most SIPP providers here in the UK wouldn’t even consider allowing an individual residing overseas into their SIPP. We have a great track record in helping advisers with complex, or just unusual scenarios. It’s something we pride ourselves on – the clues in the name, Pension Solutions Group.

I’ve expanded on a few key differences between ‘International’ and ‘Standard’ SIPPs but really, I need to reiterate the point that the concept of a ‘International’ SIPP is misleading. All SIPPs, by definition are UK products, regulated by the Financial Conduct Authority (FCA), and can only be provided by UK based firms who are also regulated by the FCA. The differences are largely administrative.

Perhaps I would say this, but if you want to succeed in this sector, I can’t over state how important it is to have the technical know-how paired with a real drive to provide support and service at a level most pension providers can’t offer.

The team here at PSG SIPP are largely trained ‘in house’ making them experts in the intricacies of dealing with our international clients and advisers. We also provide turnaround times that are pretty unheard of in our industry, for example, most work being actioned within three to five days but even beyond that, we’re genuinely always happy to help, in any way we can.

THE LOOP | JULY 2021

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Get to know: BZB IT

Keeping IT going Crucial to the success of any company operating within the financial sector is a well maintained and reliable IT infrastructure that ensures the right expertise is always on hand to keep everything running smoothly.

But for us it is also about working with like minded people who share our vision of putting customers at the heart of what they do and being unafraid to do things a little differently.

Much like most of the new business our own companies adopt, our relationship with BZB all began with a recommendation.

But what makes BZB services unique?

It’s not just their excellent technical knowledge and understanding that initially caught our eye but their enthusiasm to tailor their service to meet our needs and really understand us as a business.

“We think of ourselves as a readymade IT department that painlessly slots into our client’s operations. I work to ensure there is always a focal point for the relationship, providing a single person to build a rapport with and learn the quirks of each business.

The team develops the technical standards, implements the work in the background, and does any break-fix that comes to the helpdesk. We have a templated way of doing IT, and our technical skill allows us to flex that to meet the differences and unique needs of each business we work with.”

Pearl’s (Account Manager for PSG SIPP) husband had previously worked Dragisa Matovski, Technical Director with BZB Company Owner Drag before at BZB IT he founded the company and so personally knew Drag’s approach to IT support was something special.

Like many of PSG’s own products and services, BZB understood from Our COO, Natalie, wasted no time in the get-go that there is rarely a one meeting Drag’s team, agreeing to work size fits all solution when it comes to together and formed a relationship working with different businesses, as that could enhance both our internal each will have their own unique set of IT support and ensure our own teams goals and challenges. could continue to grow whilst our IT demands kept up with the pace.

The similarities between our two companies don’t end there either.

For Sam Vesey, IT consultant at BZB, Further to all of this is an understanding working with PSG was a no brainer and of the people that help shape a business. felt an equally natural fit.

In both our companies, people are our product and our most important asset.

A well supported and well understood team will thrive from interacting with “We all love working with like-minded and helping people, and like us, every people who have a similar view of the one of the BZB team is altruistic and world, and from my understanding, the culture and service we’re aiming to would list this as a top trait. create is similar to what PSG has.”

These shared values makes for a Sam Vesey, IT consultant at BZB IT greatly rewarding partnership for us, one that can only continue to blossom.

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“When you’re putting out a service you can be proud of and are meeting clients needs, the interaction you get from the right kind of client is incredibly rewarding. PSG are that right kind of client, holding similar values and understanding what it truly takes, not just a marketing strapline, to deliver exceptional service.”

Dragisa Matovski, Technical Director at BZB IT

To find out more about BZB’s services, visit bzbit.co.uk

Company update

We’re up for an award!

We’re over the moon to announce that TPSG is a finalist in the Legal and Financial category for an award in the Bath Life Awards 2021.

These prestigious annual awards are one of the most tightly contested events in the area, recognising business excellence in Bath and the wider region.

Winners will be announced at a glitzy and glamorous ceremony which has been traditionally held at the Bath assembly rooms on 9th September.

We’ll be keeping our fingers crossed that our team walk away on the night with a shiny new gong to put pride of place in our of office!

Talking of awards, both Natalie Pike (our COO) and Pearl Belcher (Accounts Manager) have been nominated and shortlisted for this year’s Woman in Pensions Awards 2021.

Celebrating 25 years of recognising influential women in our industry, this unique event will be celebrated at the Marriot Grosvenor Square London in November.

We wish them both and the PSG team the very best of luck!

THE LOOP | JULY 2021

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Industry Insight

Busting Industry Myths and service can and can’t dos. In this edition we look at common transfer myths.

Mythbusters MYTH

MYTH

SIPP providers are responsible for defining and controlling the transfer process

SIPP Providers are responsible for ensuring the Transferring Scheme approves the transfer

BUST IT!

BUST IT!

SIPP Providers can initiate a transfer process, but this process is very much defined and outlined by the transferring scheme.

SIPP Providers have no power to hold a Transferring Scheme to account if a Transferring Scheme refuses to pay the transfer.

MYTH

MYTH

SIPP Providers have a duty to chase transfers

Providers must be able to confirm a deadline for when a transfer will be completed

BUST IT! It is not the responsibility of any SIPP provider to chase transfers. This is something most (including PSG SIPP) are happy to do to assist. However, excessively chasing Transferring Schemes for updates in order to complete a transfer more quickly is not only counterproductive but pulls us away from a provider’s ability to administer clients schemes. Even worse, it can raise red flags of a possible pension scam with the Transferring Scheme that could potentially either delay or jeopordise a transfer from completing.

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BUST IT! Providers have no control over a Transferring Schemes service levels, their internal checks or processes they follow in order to ensure compliance with the industry regulator and how long they will take to complete these. What’s more, the recent pandemic has caused delays for many companies alongside an increase in scams which has heightened risks around transferring and led to increased security checks. This makes it virtually impossible to set a deadline for completion.

Hi sir, I’ve sent the paperwork to arrange the transfer into your new SIPP. It’s pretty much done and dusted!

Time to kick back and relax.

ta Wai nd! seco

You see, providers have a duty to act like a pension transfer management service.

Your new provider will control the whole process and ensure it happens immediately.

Providers are not allowed to do this.

WHAT??

Transfers are their responsibility!

A good provider will chase regularly but they have to be cautious about how often as this can raise red flags of pension liberation fraud

Actually, they’re not allowed to provide an end-to-end management service. What’s more, providers have to abide by the transferring schemes internal processes.

Each will have different checks and processes to complete, so it can be hard to define how long a transfer will take.

Well that’s not good enough! The new provider should chase every day until its done!

Well, what happens then?

Hi sir, about your transfer…

The transferring scheme could delay the transfer or even refuse it!

THE LOOP | JULY 2021

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Like to know more about how commercial property in a pension works?

Together with the expertise of Coffin Mew and our very own in-house experts, we’ll tackle the subject of commercial property in a pension scheme and the legal work involved via a live presentation and Q&A. We’ll discuss:

Register to attend our free Webinar on Wednesday 13th October at 11am Register

• What the commercial property market looks like in a Covid-19 world • How commercial property in a pension scheme works • The legal requirements and considerations • The benefits of working with TPSG and Coffin Mew

Lookout for further details on our website and in the next edition of The Loop