On 2 December 2020, the FCA published a letter it had sent to the board of directors of firms assigned to the SIPP operators’ portfolio.
The letter sets out the FCA’s key concerns and expectations for firms in the portfolio. The FCA’s key concerns are set out under four broad headings: financial resources, complaints handling, pension scams, product governance, and international SIPPs.
In terms of complaints handling the letter states:
- The FCA continues to see complaints made to firms about the adequacy of their due diligence prior to accepting an investment or when establishing relationships with introducers. Firms must have appropriate management controls and take reasonable steps when handling complaints to identify and remedy any recurring or systemic problems. Where identified – and if the firm has not done so already – DISP 1.3.3R requires it to correct root causes where it is reasonable to do so.
- Principle 6 says a firm must pay due regard to the interests of its clients and treat them fairly. Guidance on this obligation in the context of complaints handling is set out in DISP 1.3.6G. Where a firm identifies root cause issues, it should consider whether it is appropriate for it to give redress – or a proper opportunity to obtain it – to customers in similar circumstances who have not yet complained to the firm.
- As per the FCA’s recent statement with the Information Commissioner’s Office and Financial Services Compensation Scheme, selling personal data to claims management companies may give rise to issues around the fair treatment of customers and compliance with privacy laws. In particular, firms seeking to rely on legitimate interest grounds for processing such data are highly unlikely to meet the requirements of the General Data Protection Regulation.