The Association of Member-Directed Pension Schemes (AMPs) has said it is "not convinced" by the Financial Services Authority's proposals on Sipp capital adequacy rulings.
Last year, the FSA ruled that Sipp providers could have to hold £20,000 in capital plus extra if they handled "risky" assets such as property.
AMPS consulted with 56 Sipp providers prior to sending a detailed 56-page response to the consultation paper CP12/33 to the FSA.
Andrew Roberts, chairman of AMPS, said: "We are not convinced (as we have not been provided with any evidence) that a move away from expenditure or a close proxy for such is the best way to establish wind-down costs even if third parties have to be appointed to deal with the wind-down."
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He suggested a measure by number of Sipps held would be a more representative calculation than assets under administration.
"We do not agree that assets under administration should be used for calculating a firm's capital requirement as there are some unintended consequences that would increase the risk of consumer harm as time progresses. This suggests that the proposed formula is not prudent.
"We do not understand why a small sector such as ours should effectively be a pilot for the FSA to trial a fundamentally different regulatory capital calculation method."
Problems included misalignment with Sipp operator charging structures, misalignment of interests between Sipp operators and consumers regarding asset valuations and uncontrollable calls for capital leading to non-robust business models.

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