By Paul Lewis
BBC Radio 4's Money Box
The government said it is not a suitable investment for most people
The government is considering regulating pension schemes which people run for themselves, the BBC has learned.
But advisors fear that any change will come too late to prevent property schemes being mis-sold to naive investors.
Around 100,000 people currently have a self-invested personal pension or SIPP.
They are generally wealthier people and the pension money has to go into things like unit trusts or shares which are regulated.
But from next April, the government is sweeping away most pension rules and people will then be free to put unregulated investments into SIPPs.
Already adverts are promoting the tax advantages when property, wine or stamps are put into these schemes.
But independent financial adviser Robert Reid of Syndaxi told BBC Radio 4's Money Box programme there could be trouble ahead.
"My main concern is that companies which are not regulated such as property developers will be using SIPPs to entice people to make property purchases which may not be in their best interest long term," he said.
"I think some developers will use it as an excuse to get rid of property that they were having difficulty with already."
And he warned that people who buy will have no redress.
"It will be very difficult to raise any complaint about the advice or the position they find themselves in," he said.
"If they go to the Ombudsman he will simply say 'the product is not regulated'. I do believe if SIPPs were regulated it would tighten this up."
The Treasury has told Money Box that it will be issuing a consultation paper this month on regulating SIPPs through the Financial Services Authority.
Ian Dawson from SIPP trustee and administrator Wolanski opposes regulation of SIPPs themselves. He wants the investments in the SIPP to be regulated.
"It's putting things the wrong way round. It's like regulating the cornflakes box not the cornflakes inside.
"I am not sure it would work. It would still leave unregulated products out there.
"Much better to insist that property developers, for example, have to get their scheme signed off by a regulator as unit trusts do now."
He also warned that regulation would put up his costs. He would rather advisers policed the system.
"I'm very much in tune with Robert Reid's concerns.
"We have seen schemes that look a bit dodgy. But I think the problem is exaggerated. There are enough professional IFAs out there to make sure there isn't a mis-selling scandal."
The Financial Services Authority told the programme that if there was a change in regulation, it could not happen until sometime in 2007.
BBC Radio 4's Money Box was broadcast on Saturday, 3 September, 2005 at 1204 BST.
The programme will be repeated on Sunday, 4 September, 2005 at 2102 BST.