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Frenzy and enemies

Pointon York Sipp Solutions managing director Christine Hallett believes the media mania over Sipp misselling is misguided and fails to recognise the business basics

I am amazed by the frenzy in the media and the conclusions being drawn that the new investment opportunities for pension schemes from April 2006 will cause the next misselling scandal for Sipps and property.

This is a prime example of people putting two and two together and making five.

Some players in the industry are fuelling the hype to suit their own agendas, primarily the insurance companies, because it is not in their interest for investments to be directed away from insurance scheme pension funds with mediocre performance into other asset classes.

Property investment is a sound asset class if sound investment principles are applied.

The ability to put different property classes into a pension scheme does not turn Sipps and property investment into the next misselling scandal.

Let us try and remember that these new investment classes will be allowed in all pension arrangements from next year, so why focus on Sipps?

A Sipp is a wrapper that is administered under a set of rules, and has been used very successfully since their launch in 1990 where it suits an individual to have a more flexible, controllable and diversified approach to their retirement plans. This fact does not change from April 2006.

After A,Day advisers will no longer have to consider the type of pension as all pension frameworks will be the same. They will have to, as they do now, determine the best provider, trustee and administrator to service their clients’ pension arrangements and provide advice on the extended asset classes.

Pensions are frameworks for an individual’s retirement plan. Look at the positives that the new regime and changes will bring.

t Individuals can take greater control in their retirement plans.

t Individuals can spread their investments across a range of different asset classes, all within one pension framework.

t The tax treatment of the pension frameworks will be consistent and will conform to the same set of rules so will be easier to understand.

t An individual will have more flexibility on retirement.

t An individual has more say in what happens to their fund on their death and is not necessarily automatically left in the pockets of the big institutions.

All pensions should be regulated because they are part of an individual’s long-term financial future. There is a need now for pension advice to be sought and given and there is more of a need for a sound investment strategy to be adopted within the pension wrapper across wide and varied opportunities that individuals are now presented with.

There is no greater or lesser risk with the new asset classes being allowed from 2006 than some of the asset classes already allowed. Many people who put their retirement plans in the hands of what was considered a safe institution have suffered, so no there are no guarantees. But there is a message coming out from some of the events we have seen over the last few years and that is we should not take anything for granted. We need to engage in the dialogue about our retirement plans, we need to diversify, we need to take control but with the assistance of pension professionals and specialists.

This is the new world of pensions. It is not about Sipps, it is not about property, it is about an individual’s future and freedom and choice so it is wise not to get caught up in the hype and not to read too much into some of the stories.


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