Fay Goddard, AIFA's deputy director-general, told the Association's members that it is not opposed to the move.
Expanding on the reasons behind this response Goddard said: "This decision, coming so late in the day, has taken many people by surprise and caused consternation. Many IFA firms, life offices and other stakeholders have invested considerable time and money in preparation for the new investment regime and many have already been raising awareness or advising clients of the opportunities available.
"Whilst we recognise that there will be considerable disappointment in some quarters over this decision, we do have to consider why the Government felt it necessary to make this u-turn. There has been growing concern over the media focus and marketing tactics of certain companies, particularly those outside the regulated community. SIPPs have been portrayed as an easy way of buying a property, heavily discounted by the tax advantages, without sufficient information of the risks and legislation associated with the purchase. Although the government has highlighted property as their main concern, the anti-avoidance measures apply to other assets including fine wines, classic cars and works of art.
"However, we also have to question why it took the government so long to act when throughout the consultation and subsequent drafting of the legislation the ability to invest residential property in a pension was always considered a 'too good to be true' opportunity for those with sufficient funds and appetite for diversified investment. This was never going to benefit the mass market or encourage higher take up of pensions amongst those that most need to.
"Overall, in the interests of consumer protection, potential reputational damage to the financial services industry and liability risks to advisers, we are not opposed to the decision. But the reversal will leave a sour taste and dented confidence in reliance on government policy.
"Looking forward, we are pleased that the government is to bring forward the legislation to establish REITs, which, for the majority, will be a more appropriate way of investing in property. "
