This is a full Sipp offering investors the option of investing solely in non-core investments at a lower cost than the wider investment options available as non-core investments.
Core investments include FundsNetworks range of over 1,000 investment funds, Standard Life insured funds and a Sipp bank account.
The Sipp bank account is a cash account controlling all investments in and out of the Sipp and pays interest at the rate of 1 per cent below the bank of England base rate.
Non-core investments cover everything else that the Inland Revenue allows to be held within a Sipp. This includes direct equities, fixed interest securities, warrants, convertibles, investment trusts traded through execution-only stockbroker Stocktrade.
Clients who choose non-core investments can appoint one of six discretionary managers – Cazenove, Tilney, Morgan Stanley Quilter, Gerrard, Newton or Brewin Dolphin – to run their portfolios. There is also the option to hold commercial property and anything else that will become eligible for Sipp investment after A-day in April 2006.
For clients selecting core investments only, there is a 100 initial charges and a 250 annual charge. As a special launch offer that will run until further notice, these charges will be waived for the first year provided at least 60,000 is invested in core investments. Those who invest in non-core investments will not qualify for this offer and will pay an initial charge of 190 if they invest in non-core investments in the first 12 months and an annual charge of 400. If they invest in the non-core investments after the first year, the initial charge will be 290. Additional costs will be incurred for other features such as property purchase and withdrawals.
Interest in Sipps looks set to increase after A Day when assets such as residential property will be eligible, so this is a timely launch. However, the market will be very competitive and service may be the deciding factor for many IFAs.