For many people this can be summed up in one word, ‘clarity’. They want to be comfortable with what they are getting with a clear understanding of the costs associated.
They increasingly want to find a provider that can tick the right boxes within a budget with which they’re happy, and over the last few years they have started to become more engaged with retirement provision and are looking for providers to offer something different from the archetypal, stuffy Life Office pension plans.
Technology is another area where SIPP providers have an important role to play – linking in with platforms and making use of advances in technology. This has already started to happen, and although not everyone is comfortable with having everything on their iPads just yet, there is a growing trend here.
So based on that, how do they view the world of SIPPs?
SIPPS have this all-singing, all-dancing image, with providers competing to offer the most features, but, as I’ve said, that’s not what people necessarily want at the moment. There’s a increasing focus on risk, and it’s fair to say that SIPPs are sometimes associated with riskier investments.
There have been some recent high profile cases where SIPPs have allowed investments that have failed to perform – and that’s been held against the SIPP, which is not always fair because it’s really down to the underlying investment itself, although it does highlight the importance of due diligence.
As well comfort around investment risk, people want reassurance that their provider is strong and can be relied upon to do the right thing. Even where customers want something that is more tailored to their needs, whether this is in regards to investments, for example, or online functionality, there is often and element of looking to trusted brands to help deliver a future retirement income. Both mainstream and fringe SIPP providers need to be able to demonstrate clearly their credentials here.
How has the SIPP market been developing?
Personal pensions and SIPPs have traditionally been viewed as two separate ends of the spectrum, but over the last few years – partly driven by the emergence of wraps and platforms – we’ve started to see three clear types of SIPPs coming through to meet different needs.