Advisers can have “peace of mind” about recommending clients to put gold in their pension plans because of a recent ruling by the FCA, GoldMoney chief executive Geoff Turk has said.
Mr Turk said: “We know from our own clients that gold is often used by people in pension planning, but now it can be included in a regulated pension scheme.”
This means people can “take advantage of the tax efficiencies available while also having peace of mind that their portfolio is protected should something happen to their pension provider,” he added.
His comments followed the August release of a 48-page FCA policy statement, A New Capital Framework for Self-Invested Personal Pension (Sipp) Operators, in which the regulator added physical gold bullion to its list of standard assets.
National Savings & Investment products, bank account deposits, UK commercial property and units in regulated collective investment schemes were also made standard assets.
Unit trusts and open-ended investment companies were taken off the standard assets list. The changes come into force on 1 September 2016.
In the statement, the FCA said: “There are approximately £2trn of pension assets under management in the UK pensions industry. Around £100bn of these assets are administered through Sipps.”
It added: “When [Sipp operators] have failed and entered administration, it has proven extremely costly to transfer the Sipp book to another provider, especially when they contain non-standard asset classes.”
Greg Kingston, head of marketing and proposition for Ipswich-based Suffolk Life, said: “Our investors and advisers show very little demand for this asset – most would typically invest through an exchange-traded fund if they wanted exposure. Physical gold as a standard asset probably means that investors won’t see their fees rise as much as they would have done if it had been classed as a non-standard asset. It also means that there should be a greater choice of Sipp providers to choose from.”
Adviser view
Stuart Read, independent financial adviser for Devon-based Sabre Financial, said: “Investors must be careful to make sure they are buying actual gold, rather than a related product such as shares in a company involved in gold.”
| The FCA’s list of standard assets for Sipps (new additions in bold) |
| Bank account deposits |
| Cash |
| Cash funds |
| Corporate bonds |
| Exchange-traded commodities |
| Government and local authority bonds and other fixed-interest stocks |
| Physical gold bullion |
| Investment notes (structured products) |
| Shares in investment trusts |
| Managed pension funds |
| National Savings and Investment products |
| Permanent interest-bearing shares |
| Real-estate investment trusts |
| Shares listed on the Alternative Investment Market, the London Stock Exchange or a recognised overseas investment exchange |
| UK commercial property |
| Units in regulated ollective investment schemes |
