PensionsMar 31 2017

Sipp survey special report: Just capital?

  • Grasp the importance of engaging with providers about their performance
  • Gain an understanding of Sipps and how new rules are likely to affect them in future
  • Learn to use data from the survey for further understanding
  • Grasp the importance of engaging with providers about their performance
  • Gain an understanding of Sipps and how new rules are likely to affect them in future
  • Learn to use data from the survey for further understanding
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Approx.40min
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CPD
Approx.40min
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CPD
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Sipp survey special report: Just capital?

James Hay, DP Pensions and Nigel Sloam (operator of the NSS Sipp) are among the latest to have taken this route over the past few months. However, existing business remains on the books, and for every provider that has seen its proportion of non-standard assets fall, there is another for whom the balance has stayed the same, and some have even increased their focus on this area. AtSipp’s allocation has fallen from 10 per cent to 7 per cent, for example, but IPM’s has risen from 12 per cent to 14 per cent.

 

Charges

Table 2, showing providers’ charges, is one area in which change may have been expected. Some commentators expected fees to rise as a result of the new rules, but as with the October survey, this year’s findings suggest little change so far. 

Where fees have risen, many have crept up in line with inflation. In some cases, fees have fallen, as in the case of Rowanmoor’s transfer charges.

One notable difference in this year is not fully reflected in the table: a number of firms have stopped accepting in-specie contributions as a result of an HM Revenue & Customs crackdown (see page 21). Mattioli Woods is among those to have called for “a sensible end to the in-specie contribution saga, with straightforward transactions getting tax relief” in its survey response.

If there is pressure from changing regulation, it is perhaps being offset by continued growth. Table 3 indicates business levels as of 1 January 2017. 

Remove Old Mutual Wealth, which has disclosed figures on this occasion, and the overall number of plans set up over the 12-month period appears to have dropped slightly from the 92,700 recorded in the previous survey. 

However, this masks a notable divergence between open-architecture and platform-only Sipp providers. The former, offering full Sipps, are able to accept more complex investments, and are favoured in particular for their ability to accommodate commercial properties. Most of these operators have seen sizeable increases in the number of new plans set up, but for platforms it is the opposite story. Hornbuckle, for example, set up 1,250 plans in the year to 1 August 2016. Four months on, and the 12-month figure has risen to 1,659. 

By contrast, most platform Sipp providers have seen growth drop off. These falls are not negligible, either – growth rates have fallen by between 8 and 10 per cent in the majority of those cases. Some, such as James Hay, have seen growth halve, in part due to taking a stricter approach to esoteric investments.

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