Another Sipp provider attempts to reduce exit fee barrier

Self-invested pension provider City Trustees has launched a property transfer campaign targeted at financial advisers, in an attempt to help advisers move dissatisfied property investors away from other Sipp providers.

The Mattioli Woods’ owned pension company claims to have reduced its set up fee and transfer costs by over 40 per cent to help reduce the cost of transferring from existing providers. The new £1,000 discounted fee will run until the end of March 2015.

City Trustees said the campaign is designed to make it easier for IFAs to transfer their clients’ poorly administered property Sipps onto a “robust and efficient platform” for greater flexibility and client satisfaction.

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This is the second Sipp firm in recent months to try to break down the exit barriers. In April, Suffolk Life halved the property acquisition fee to £725 where a panel solicitor is used.

At the time, Greg Kingston, head of marketing and proposition for Suffolk Life, said: “High exit fees are putting off advisers from recommending a change of provider, and Sipp property investors often baulk at the cost of making the change, even from a provider who’s no longer providing the service they need.”

An investigation by FTAdviser, carried out in March, found the cost to transfer a commercial property out can range from £250 to £800, with Hornbuckle Mitchell being the most expensive.

Transfer in-costs also range from £450 to £1,450, FTAdviser found.

At the time, Sipp providers were frustrated over some firms’ charges to transfer out, which they claimed were high to discourage clients from transferring out of their existing scheme.

City Trustees said in a statement: “Due to the complex nature of the asset, there are often expensive exit, set-up and legal fees in respect of the inspecie transfer, which tends to result in clients remaining with their existing provider and reluctantly having to continue to accept poor service.”

Ed Carey, managing director of City Trustees said: “We have reduced our initial costs of property transferring fees to help break down the cost barrier, enabling clients to transfer onto a financially strong and robust administration platform.”

The City Trustees’ fee proposition will also feature reduced legal fees.

Mike Kempster, business development manager at City Trustees said: “We have teamed up with a specialist legal firm that has extensive knowledge of Sipp and Ssas commercial property transactions, and who will also provide a streamlined and cost-effective legal service to include the change of legal title between providers.”

Additional reporting by Donia O’Loughlin