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Self-Invested Pensions - May 2014



    They were intended initially for the wealthy investor, who had access to a diverse range of assets, and wanted to put these assets to good use.

    The first Sipps were designed for an elite band of investors but they soon took off because they were not bound to invest in the company’s own investment funds, and savers could put shares, property and other assets into the pot.

    But Sipps have come under scrutiny in recent years.

    As they have become more accessible to people with limited funds, so advisers have found them popular products to recommend and the regulator has looked closely at how they are being sold.

    The FCA is currently undergoing a thematic review, the results of which are due to be released shortly, which will determine the future regulation of Sipps.

    One of the biggest concerns is the capital adequacy of Sipp providers. There are so many companies offering Sipps, some of which are small and for whom Sipps barely register on the radar, and the FCA is worried about the prospect of Sipp companies failing.

    There are concerns in the industry about more esoteric products being put into Sipps, and whether the wrong products are being sold to unsuitable people.

    As the financial services industry is getting to grips with the latest earthquake in pensions, namely the ban on compulsory annuitisation, so the Sipp sector is preparing for its own dramatic changes.

    Melanie Tringham is features editor of Financial Adviser

    In this special report


    Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

    1. According to Greg Kingston if restrictions on tax relief are lifted Sipp providers can expect a decrease in saving beyond the age of 75, true or false?

    2. How many thematic reviews have there been into Sipps?

    3. According to John Fox what will be the biggest impact on Sipps of the thematic review?

    4. According to John Fox, another consequence of the thematic review is for client fees to jump up, true or false?

    5. According to Mike Morrison, what was the key attraction of Sipps?

    6. According to Mike Morrison, why did the development of stakeholder pensions in 2001 have a big impact on pensions in the UK?

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