American Express Financial Services Europe has established a self-invested personal pension for its wrap account.
The adviser service Sipp provides access to a range of investments including Oeics, unit trusts, shares traded on the London Stock Exchange and Aim, plus cash awaiting investment. It also has a phased retirement option where the investment is divided into segments which can remain invested or be used for income drawdown.
There is no minimum investment for the Sipp but clients will need to have a large enough amount to make investing worthwhile after the deduction of charges. An annual charge of between 0.3 per cent and 0.5 per cent is payable for the wrap service and the Sipp charges are payable on top of this. There is a £200 Sipp set-up fee, an annual charge of £340 and a drawdown charge of £120 but these will be reduced until April 2005.
The addition of a Sipp widens the appeal of the American Express wrap proposition, bringing it in line with other recent entrants to the wrap market such as Abbey. Abbey enables clients to choose a Sipp-only wrap option at an annual cost of £300 - half the cost of its full wrap service - but American Express does not have a similar arrangement. However, as the point of a wrap service is to bring all investment types and wrappers under one roof, a Sipp-only facility may not be missed by potential investors.
The Abbey wrap Sipp, based on the James Hay Sipp, does have wider investment choice than the American Express product as it allows investment in commercial property. Although more features, such as commercial property investment, may be added to the American Express product at a later date, IFAs will be more interested in what the product currently offers.