The past three years have been an interesting time for self-invested personal pension (SIPP) providers and the amount of providers in the ‘bespoke SIPP space’ is on the decline. The changes have been brought about by new capital adequacy rules (as of September 2016). In short, new (and positive!) rules for providers to protect clients to ensure that we don’t hear any more horror stories about clients investing in overseas property that doesn’t exist (as an example!). The market is changing – but what does that mean for me and my clients?
A lot of my work is bespoke pension planning which requires a self-invested pension scheme, for me it is simple. I will recommend the provider I think is most suitable for my clients and their circumstances and objectives. There are still plenty of them out there – and good ones at that. My choice is as with any recommendation:
- Quality administration – people! I want to be able to pick up the phone and talk to someone who knows me and the planning I am achieving for my clients. A team that will add value, and use their initiative. Proactive.
- Cost effectiveness - not the cheapest. A fair and clear charging structure which is easy to understand and good value.
- Value add – technology & efficiency. The capacity to provide instant information and a firm moving with the times to meet client expectation.
Clients do not want the minutiae, it is my job to look under the bonnet and understand the provider I am recommending, my due-diligence on the business I choose to run my clients pension savings. But like anything, my choice is ultimately made on good old fashioned values; high quality administration, cost effectiveness and value added service
The SIPP market is contracting, but this drives competition which in turn allows great outcomes for clients – all positive in my eyes!
A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interest rates and tax legislation.