Intelligent Money SIPP Under Scrutiny: FCA Restricts Asset Movement
Pension provider Intelligent Money has come under the FCA’s microscope, agreeing to a restriction on their ability to freely manage client assets. This move, implemented in February, throws a spotlight on potential issues at the Nottingham-based company.
The restriction essentially freezes Intelligent Money’s assets, preventing them from selling, withdrawing, or reducing their holdings without explicit FCA approval. However, they can still make routine business payments up to a limit of £20,000. Importantly, client-initiated transactions like divestments or investment switches remain unaffected.
While Intelligent Money remained tight-lipped about the restriction, the FCA’s reasoning is clear. Asset restrictions are designed to safeguard consumer redress. By limiting Intelligent Money’s ability to move assets, the FCA aims to ensure there are sufficient funds available to compensate clients if necessary.
This development coincides with a surge in complaints against Intelligent Money at the Financial Ombudsman Service (FOS). Over 80 complaints are currently being processed, hinting at potential shortcomings in the company’s practices.
A recent FOS decision sheds some light on the nature of these complaints. The ombudsman ruled that Intelligent Money failed to conduct proper due diligence on certain high-risk investments offered within their SIPP product.
Specifically, the FOS found Intelligent Money lacking in its assessment of Greyfriars (a now-defunct discretionary fund manager) and Active Wealth (a firm previously sanctioned by the FCA for unsuitable pension transfer advice). The ombudsman concluded that Intelligent Money failed to perform adequate initial and ongoing due diligence, ultimately neglecting their regulatory obligations and allowing these risky investments to proceed.
As a consequence, the FOS ordered Intelligent Money to compensate the client for their losses, with a maximum payout of £160,000.
This isn’t the first time Intelligent Money has faced controversy. Last year, they proposed a 1% fee on all advised pension clients, sparking advisor backlash that ultimately led to the charge’s cancellation. They also offer their own range of SIPP portfolios managed by P1 Investment Management, catering to non-advised clients.
Furthermore, in 2023, Intelligent Money informed non-advised clients of a planned switch to direct servicing, terminating advisor fees and assuming full management responsibilities.
Intelligent Money’s popularity stems partly from their low fees, which stood at £195 annually last year. However, the recent developments raise questions about the company’s asset management practices and potential consumer risks.
With limited information on Intelligent Money’s financial health and the FCA’s silence on the matter, the situation remains shrouded in some mystery. Only time will tell how these developments unfold and what impact they may have on Intelligent Money’s future.