An FCA alert which went out to Sipp providers comes “after the horse has bolted”, the head of a pensions body has suggested.

Neil MacGillivray, chairman of AMPS, said scammers using Sipps are “happily grazing on new pastures” and “way ahead” of the regulatory authorities.

The FCA advised AMPS at the beginning of August that they had issued an alert highlighting some of the risks arising from authorised firms accepting business from unauthorised introducers and lead generators.

Although by and large it is directed specifically at adviser firms, Sipp providers were included, Mr MacGillivray said, adding that any such guidance was more than welcome.

Mr MacGillivray, head of technical support at James Hay Partnership, told sister website Sipps Professional: “The Sipp industry has been dogged over the years in regard to pension liberation and dodgy investments scams.

“But as the industry has become aware of the issues it has been pro-active and taken steps such as tightening up on who it will take business from, as well as carrying out more due diligence on non standard investments.

“The problem is there can be quite a delay from an investment being accepted into a Sipp before it is identified as a scam. Take the example of an investment that guarantees a return of 10% per annum but only investigated four years down the line when the payments stop.

“Though the Sipp provider has tightened its due diligence procedure and would not accept the investment now it’s the failure of an investment accepted 4 years ago that hits the headlines.

“An alert is meant to put you on your guard, so is this alert too late and taking action after the horse has bolted?

“The sad and somewhat depressing fact is that those involved in such scams are happily grazing on new pastures and appear to keep way ahead of the regulatory authorities.”

See more from Neil MacGillivray on Sipps Professional by clicking HERE.