Pensions  

Sipp firm reviews all charges as lump sum access looms

Self-invested pension provider Rowanmoor Group is reviewing the charging structure and marketing literature across all of its products as it prepares for pension freedoms from next year and particularly the new ad hoc lump sum withdrawal option, FTAdviser can reveal.

Rowanmoor Group told FTAdviser it is reviewing charges on all of its products, including its self-invested personal pension and small-self administered scheme options, as well as its Family Pension Trust, which it describes as cross between a Sipp and a Ssas.

Robert Graves, head of pensions technical services at Rowanmoor, said this is a direct result of the new freedoms to be implemented in April 2015.

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He told FTAdviser he did not expect material changes in overall charging levels, but that how charges were calculated would be revised to “meet the behaviours of clients following the changes”.

Mr Graves also highlighted the impact of the uncrystallised lump sum option which will give retirees ad hoc access to their fund, saying the “ramifications of how it sits with the current structure” need to be considered.

Elsewhere, a number of providers have already moved to remove drawdown administration fees to reflect this becoming more mainstream.

He said: “Because of the new flexibilities, in line with I would imagine every other Sipp and Ssas provider, and pension providers, we have to look at the charging structure around all the facilities and we will be offering a whole range... in terms of flexibility of how you draw your pension.”

“We are reviewing the marketing material and the charging structure to reflect the new flexibilities in April.”

Last month, fellow Sipp provider Suffolk Life told FTAdviser popular suggestions that Sipps will benefit from the changes to pension rules may be proved wrong, as many could utilise the new rules including uncrystallised lump sums to withdraw all of their fund.

Greg Kingston, marketing director, acknowledged that there would be more money going into Sipps, but said the influx of investors would be those with £50,000 to £60,000 to invest and they would probably seek to withdraw this within a few years.

Recently, a few Sipp providers have announced changes to charges due to the changing pensions landscape, with the axe has falling on drawdown fees in particular.

In July this year, Aviva scrapped its drawdown charges following the Budget announcement. Old Mutual Wealth followed suit in October this year scrapping its drawdown fee and minimum investment charge.

Last month, Axa Wealth said it will remove regular charges on its Pension Investment Account and drawdown services available via the Elevate platform.

ruth.gillbe@ft.com

Additional reporting by Donia O’Loughlin and Ashley Wassall