Curtis Banks has raised the cost of its administration fees on both of its self-invested personal pension (Sipp) products in order to achieve a better balance between fee income and interest income.
In an announcement this morning (November 30), the provider revealed its annual administration fee on the mid Sipp will increase by £50 to £310 and the full Sipp will increase by £140 to £720.
These changes will come into effect from February 2021, alongside changes to the way interest accrued on cash is passed on to clients.
Curtis Banks said the fees remained competitive against the market but would help the provider become more transparent and also provided more certainty to clients.
Will Self, chief executive officer of Curtis Banks, said: “We are committed to the Sipp sector and my vision is to continue to innovate and drive positive change and behaviour.
“I have a clear vision for not only the Curtis Banks Group but also the sector itself. The Sipp sector continues to be under invested, has a long tail of small providers and is under pressure from the regulators and PI insurers.
“Sipps are part of my DNA and if we don’t continue to innovate and invest then we will stagnate and no longer be relevant for advisers and their clients.”
The provider has also implemented steps to "improve the interest received by clients" as rates increase, it said.
Interest received on cash balances is currently used to help meet the annual running costs of Sipp plans but this has previously been shared with clients on a discretionary basis.
To improve transparency in terms of annual running costs, the provider is changing how the interest on Sipp bank account balances is applied, which is said will be “of particular benefit” to advisers' clients.
Mr Self said providers have relied on this method of paying Sipp costs “for too long”.
He added: “Now is the time to drive clarity on this and we believe that this change is an important step in making the Sipp sector fully transparent and we expect others to follow quickly.”
Curtis Banks’ move to a more “sustainable” and “resilient” business model started with its acquisitions of Talbot and Muir and FinTech provider Dunstan Thomas earlier this year (July 2020) for £53m.
These acquisitions have changed increased the amount generated from recurring fee income, according to Curtis Banks.
Along with today’s fee changes, this will “materially reduce the group's overall sensitivity to interest rates”, it added.
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