“The adviser would need to take into account the client’s retirement goals, appetite for risk, investment time horizon and financial status and whether the client wished to use this for any specific purpose, for example property investment,” says Rowanmoor’s Robert Graves.
“For example,” adds James Sumpter, wealth management director at Bestinvest, “if a client is simply looking to manage investments on an execution-only basis with online dealing, then it would be pointless recommending a full service Sipp that costs circa £500 a year and does not offer online dealing.
“[However], this Sipp could be ideal for a client who want majority of investments managed on a discretionary basis, but with flexibility to include more esoteric investments in the future.”
As Mr Graves, head of pensions technical services at Rowanmoor Group, says, all Sipps are built on the same legislative framework though some scheme rules may be more accommodating than others.
“In particular, the range of acceptable investments will be a key differentiator between Sipps. Factors to consider should include due diligence procedures, a good service record, and specialist support such as in-house actuarial or technical services.
“Whilst product charges are often the focus of comparison it is value for money that should be considered.”
Hyman Wolanski, managing director of Sippchoice, adds: “Having identified the right range of product then your looking at the whether the investment platforms available within the Sipp is compatible with you the adviser”
“Then things like charges, the reputation of the organisation, any experiences you’ve got of dealing with them, how flexible are they, how much of a personal service they provide – and a lot of that will be very difficult to identify as its reputation and experience.”
To demonstrate the product you’ve chosen is right for your client, suggests Mr Sumpter, “you will need to demonstrate that the investment choice, level of flexibility and service available from a particular Sipp justifies the cost versus alternatives such as stakeholder pensions, other Sipp providers and personal pensions.”
As mentioned, the array of different Sipp operators in the market means its crucial that advisers carry out due diligence, including the Sipp operator’s due diligence processes involved in accessing the acceptability of investments.
