As well as investing, in light of the greater access to pension pots granted since April 2015, advisers need to contemplate whether Sipp providers offer the full range of withdrawal options.
Options to access pension pots include flexi-access drawdown, uncrystallised funds pension lump sum, as well as the ability to continue using capped drawdown if the investor selected this prior to April 2015.
Additionally Mr Evans notes Sipps offer investors the choice of who can receive any remaining pension on their death, including the ability to set up beneficiary drawdown plans or pass benefits onto a bypass trust.
However with so many options with Sipps, Mr Evans says investment choice can be bewildering to the unadvised or novice investor.
While you can use Sipps to take retirement income while remaining invested this action carries the risk of depleting the fund and the investor’s pot running out before they die.
Regular reviews of the drag of withdrawals on investment performance will allow any necessary adjustments to be made, Mr Evans points out.
When reviewing the market, Mr Evans adds that advisers should remember some parts of the Sipp market are financially weak and providers have failed in the past.
He says: “It is important that due diligence is undertaken to understand which providers are unstable or who may want to exit the market before more onerous capital adequacy requirements are introduced next year.”
