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Fewer than half of Sipp providers can facilitate adviser charging

FSA Entrance 480

Fewer than half of Sipp providers can currently facilitate adviser charging on their products, while only 40 per cent can produce key features illustrations in line with proposed FSA requirements.

From 1 January next year, the ban on commission payments will mean clients will pay for financial advice either up front or through a charge levied on funds held in a financial product.

The FSA is also proposing to bring in tougher disclosure requirements for Sipp operators from 1 January 2013.

Under proposals published in March, all personal pension schemes, including Sipps, will have to produce key features illustrations, effect of charges and reduction in yield information.

According to a survey of 65 product providers conducted by Capita Financial Software, just 45 per cent can facilitate adviser charging, while only two in five meet the regulator’s proposed Sipp illustration requirements.

Capita product director William Watling says: “With little over four months to go before RDR, this is astonishing. From the research and our own conversations with advisers it is evident that many providers do not currently have answers to adviser charging questions.

“It is also clear that providers are significantly behind the curve with regard to illustration capabilities and we wonder how many still won’t be ready on 1 January 2013.”

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