IFAs are calling for Sipp providers to be more clearly defined as concerns mount that many personal pensions are masquerading as Sipps to cash in on investor interest.
IFG Group financial planning strategist Donna Bradshaw says advisers are increasingly having to differentiate “pseudo” Sipp providers from products that are just personal pensions with high charges.
She says consumers and IFAs should be able to identify which products offer the full investment flexibility that Sipps are designed to provide.
Bradshaw says: “What is a Sipp? A Sipp should allow you to invest in anything but a lot in the market do not. That is not a Sipp as far as I am concerned. Can you really call yourself a Sipp if you are not allowing a full range of investments? These are pseudo Sipps or personal pensions which are just calling themselves Sipps for marketing purposes.”
The Pal Partnership business development director Richard Mattison says: “There are around 15 or 20 genuine Sipp providers but according to the FSA there are around 150 firms calling themselves Sipp providers.
“The world is Sipped out. It is now a mainstream product. Personal pensions in their old guise do not exist any more. The real impact will come in time. The FSA will slowly go round and start chucking out the firms it does not like.”