As with previous years, the purpose of the analysis is not to highlight those that do not meet the requirements, but rather to give a reflection of the industry as it currently stands, and how prepared it is should any requirements come into place. Similar to last year, most providers who chose to respond were at the upper end of the industry in terms of size. Sipp providers are still under no obligation to hold the requirements as yet.
Mike Morrison, head of platform technical at AJ Bell, says that there are two sides to the coin with regulator reviews. “On one hand, the regulator is keen to make sure Sipp operators have capital at hand to be able to make sure that any issue that arises can be met, hopefully to the customers satisfaction. On the other hand, the Sipp thematic reviews are to make sure that Sipp operators understand the business that they are in.”
He adds this is not a case of ‘big operator good’ and ‘small operator bad’, but that all successful operators will need to have a business plan and an understanding of the processes and controls they need to operate.
“We know we get a capital adequacy regime but we do not know on what basis - action is required sooner rather than later,” he adds.
The charges applied remain largely unchanged across the board, as with previous years. Costs vary hugely depending on what the client is using the Sipp for and what type of investments they want to access. Table 4 details whether providers levy a fee on an all-inclusive or per-transaction basis. Initial charges into Sipps vary, with many having a free-of-charge entry, to Mattioli Woods, which charges £895 upfront.
Depending on what the Sipp is used for, costs and transaction charges will always be relevant. For frequent traders, it is important to check transfer costs, while those who look to a Sipp to gain access to commercial property need to see if there are any additional charges such as management or annual property fees.
As property is becoming a more popular investment with Sipp holders, Table A details the charges and, more specifically, what type of property a Sipp can hold. This can be anything from hotel rooms, overseas property and land.
“The regulator’s view on property in general seems to go against the views of the Sipp profession as a whole,” Talbot and Muir’s Ms Trott says. “Property, when dealt with by competent professionals, can be a good investment. The regulator seems to focus on the lack of liquidity and the bad record-keeping of some historic providers to deem it non-standard.”
