Standard Life hikes Sipp charges by 4%
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Standard Life is increasing its Sipp charges for all existing customers by 4 per cent and introducing a £750 charge for new customers who transfer their Sipp to another provider within 12 months.
As of January 1, 2011 all charges for existing customers will increase by 4 per cent and Standard Life will introduce a drawdown annual review charge of £100. This relates to a new review service that will be available at the end of March 2011. The charge will not apply if the review is requested and completed online.
Standard Life will also introduce a £640 charge for customers who want to use their own solicitor for commercial property purchases or sales. Standard says an additional hourly rate may also apply in certain circumstances.
For new customers on or after January 1, 2011 Standard Life is introducing a £750 charge for customers who fully transfer out of the active money Sipp to another provider within the first 12 months. Standard Life says the charge will not apply on life events such as divorce, terminal illness and death.
It is also introducing a £175 drawdown set-up charge for customers who are invested in full Sipp options. It will apply on the first benefit crystallisation event.
Standard Life says it will write to existing customers by October 1, 2010 to inform them of the changes.
Head of Sipp Alistair Hardie says: “Our Sipp offers a value proposition for advisers and their customers which is reflected in the charges. This is only the third time we have increased charges since our Sipp launched in 2004. To give this some context, our one-off set up charge for full Sipp options has increased by £13 and our yearly administration charge by £17, an extra £1.40 each month.
“In direct response to adviser feedback we have introduced several enhancements to our Sipp this year, which include a range of low cost funds, increased flexibility for commercial property purchase and more flexible adviser remuneration. We have a pipeline of further improvements on the way and I’m confident our Sipp remains competitive and market leading.”
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Readers' comments (14)
Anonymous | 15 Sep 2010 5:54 pm
Another case of a provider increasing their book with "cheap" charges then hiking them up once the customers have been snared! Not impressive at all.
I will assume that advisers who were lured into this trap start shifting their clients our before the fees are introduced!
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Julian Stevens | 15 Sep 2010 6:18 pm
It would be interesting to know just what proportion of SIPP holders actually use them anywhere near to the full extent of the investment options they allow.
We're only a small practice, but I've never yet been asked by a single client about investing beyond a carefully selected and regularly monitored portfolio of Unit Trusts/OEICs. After my admittedly limited experience with SSAS's, I'm very glad.
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Evan Owen | 15 Sep 2010 7:33 pm
How do you explain that to clients?
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John Blackmore | 15 Sep 2010 8:26 pm
I'm sure that what they are doing is all well documented and perfectly legal. It always has been in the past when they have made such changes - based upon commercial realities.
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Anonymous | 16 Sep 2010 9:00 am
4% sounds like a legitimate increase to reflect inflation but the article doesn't make that point clear.
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Paul | 16 Sep 2010 9:35 am
My God, I actually find myself in agreement with Julian for once!
How many clients actually use the features of a SIPP, albeit a hybrid SIPP like Standard's? Really these 'sipp's' are used as PPP contracts, which when they were low charging could sort of be justified. However, RU 64 et al is there for a reason, and when a provider starts throwing extra charges onto a contract the client will suffer.
I know a pension guru who has been saying for a number of years that the majority of SHP/PPP's that were churned into hybrid SIPPs will need to be unravelled. At the time I thought it was the rantings of a cynical tech person, but I wonder if her forecast is about to become reality?
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Exasperated me | 16 Sep 2010 10:18 am
Will SIPPs be the next "misselling scandal"?
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Anonymous | 16 Sep 2010 11:23 am
Which is the more eye catching headline?
1. Standard increases charges by less than the current rate of inflation? or
2. Standard hikes SIPP charges by 4%.
Next to nothing when an IFA goes from an annual fee of 0.5% to 1%. Should that be reported as:
1. Fee increase of 0.5%? or
2. IFA hikes fees by a whopping 100%?
And no, I don't work for Standard.
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PensionMan | 16 Sep 2010 11:24 am
"Exasperated me | 16 Sep 2010 10:18 am
Will SIPPs be the next "misselling scandal"?"
Possibly - SIPP's started out as a niche product aimed at high net worth individuals.
Over the years we have seen the market "dumbed down" to cater for those with lesser pension pots, some as low as £10k.
There are so many providers in the market place now that are offering cut price SIPP arrangements that must either be a loss leader or there are other charges that are not clear such as kick backs.
Running a SIPP is an expensive business due to the plethora of regulations the paperwork involved in setting up and monitoring the vast amount of investments allowed these days.
I can see a few other SIPP providers following Standard Lifes lead on this.
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Anon | 16 Sep 2010 1:35 pm
Paul...your cynical source is right - have a look at the outcomes of the SIPP, WRAP, Platform Thematic Review - IFA's better start shifting their clients out of these environments unless actual SIPP functionality is not only used, but NEEDED, and NOT available in a traditional bread and butter PPP. It's not a compliance risk (from an redress and fine perspective) anyone would want to take!!!
Let's be honest, there's a reason Mark Polson 'decided to leave', and why there's now a focus on building a new PP as well as a direct sales channel.
Standard Life,,,dare I say Average Life?
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