Sipp and Ssas clients told to pay for rule changes

Sipp and Ssas clients told to pay for rule changes

Mattioli Woods has defended its decision to charge its clients over changes it made to its scheme rules following the pension reforms.

The Leicester-based provider wrote directly to one of its Ssas clients to inform him that it would be updating the scheme rules and documentation, which would require clients to pay £495 plus Vat.

The letter said the charge was to make sure scheme rules were in line with the new legislation.

Article continues after advert

The Ssas client passed it to his financial adviser, Julian Pruggmayer of Wolverhampton-based Financial Risk Management, to ask for advice.

Mark Smith, operations director at Mattioli Woods, said: “We have always sought to operate with fully updated scheme deeds and rules for both Ssas and Sipp products believing this to be best practice.

“At times legislation may override these, but it is wholly inappropriate to allow a scheme to undertake transactions or make benefit payments that are not allowed under the scheme rules and trust provisions.”

He warned that such transactions or payments could leave the scheme and member trustees exposed to legal challenge for breaching trust provisions, particularly in the case of disputes.

“We would be frankly amazed if other providers did not update scheme provisions,” Mr Smith said, adding that Sipp clients would be charged £195 for changes to scheme rules.

However, Mr Pruggmayer said he had not come across any other Sipp or Ssas provider charging clients for updating scheme rules.

A spokesman for Sipp provider AJ Bell said it did not charge members for the administration of scheme rules being updated.

Neil MacGillivray, head of technical support at James Hay, and chairman of the Association of Member Directed Pension Schemes, said: “I find this quite surprising. There is a question about whether or not rules have to be changed, and if they do, most providers use the same standard rules.

“We are not doing this for Sipps at James Hay. This is the first I have heard of this.”

The FCA declined to comment on the rules surrounding this issue.

Adviser view

Matthew Walne, managing director of Leicestershire-based Santorini Financial Planning, said that charging for post-pension changes reforms was “not something I have come across, and I would imagine it is extremely rare. I must admit I would not be too happy if I came across it.”