A total of 23 per cent of advisers want an outright ban on Sipp providers earning money from retained interest charges in projections and reduction in yield calculations – the ‘interest turn’ from Sipp cash accounts.
This number has almost doubled in the past six months, according to research by Momentum Pensions, which shows 23 per cent of advisers now want a ban on the practice, compared to 13 per cent when the same research was carried out six months ago.
Research conducted for Momentum Pensions by Pollright among 106 advisers from 6 to 9 June using an online methodology, found 66 per cent of advisers felt that interest turn should be disclosed in line with Financial Conduct Authority (FCA) guidance.
According to Momentum, the transparency debate is becoming even more important as the FCA’s capital adequacy requirements for Sipp providers come into force on 1 September this year.
Momentum said its research showed that 77 per cent of advisers were looking for providers that had strong corporate governance systems in place, and 64 per cent wanted more clarity from the FCA or HM Revenue & Customs on non-standard assets, while 42 per cent wanted specific clarity on peer-to-peer investments.
Colin Rodger, director at Glasgow and Edinburgh-based Alexander Sloan Financial Planning, said: “In the interest of transparency, interest turn is not the greatest idea, and providers should not do it. They should adjust their fees accordingly. Fees should be open.
“It is all part and parcel of trust with clients. If something seems a little under the counter then it does not foster trust in financial services.”
ruth.gillbe@ft.com
