Self-invested personal pensions - March 2012
Sipps offer an aspect that has become appealing to investors: they have more flexibility than the average personal pension, and offer clients a wider range of assets for them to invest in. Investors, can, for example invest in commercial property through a Sipp, as well as unlisted shares, on top of the usual Oeics and unit trusts.
But the FSA has started to look more closely at sales of Sipps in recent years. It has found a huge number of transfers into this product, and raised the question of whether advisers recommending the sales were doing so for the right reason.
The City regulator has since stated that it wants more transparency over what the charges are associated with Sipps, and greater explanation of what the products are when it comes to recommending them to clients.
The issue now is that because the Sipp sector has mushroomed to such an extent, that questions have arisen over whether the product should be redefined, and if so along what lines.
Nonetheless, proponents still heavily advocate the products, not least because of their ability to invest in commercial property. Advocates say that commercial property is a good diversifier, and holds much potential in uncertain times.
My thanks go to the features, production and sales teams in producing this supplement.
Hal Austin is editor of Financial Adviser
IN THIS REPORT
A significant increase in the sale of Sipps has triggered regulatory consultation and scrutiny which the industry seems to think is unwarranted
While Sipps are not the only option, their flexibility satisfactorily accommodates the majority of combinations when it comes to pensions advice
Continued innovation in the industry is welcome but sticking to the basics of addressing the client’s needs is what continues to drive Sipps
The Sipp will stay strong by being able to purchase and invest in commercial property, since a personal pension on a wrap platform cannot achieve this
Ray Chinn, head of pensions at LV=, gives his views on the hot topics in the world of SIPPs.
An overhaul of the capital adequacy requirements is set to radically change the landscape for SIPP providers and financial advisers need to be ready.