Type: Full Sipp.
Minimum investment: Lump sum £2,000, monthly £250.
Investment choice: UK bonds, UK equities, European equities excluding UK, Japanese equities, US equities, Pacific Basin excluding Japan.
Charges: Annual up to £49,999 – 0.75 per cent, £50,000 and above – 0.25 per cent, minimum £50 maximum £500.
Allocation rates: 100 per cent.
Options: Income withdrawal, annuity purchase.
Tel: 0845 6054400.
Investment options 3.8
Company's reputation 4.3
Past performance 2.0
Product literature 3.8
Inscape has introduced the Inscape SIPP, a self-invested personal pension (Sipp) that allows investment in a wide variety of bonds and equities in the UK and abroad. The Sipp is administered by James Hay.
Looking at how the plan fits into the market, Parrott says: “It is hard to see it making much impact. There are many existing Sipp products available which offer much more investment flexibility and control over decision making. However the literature seems to target lower contributions of up to £300 per month, which is below most existing Sipp providers.”
Flowers says: “The product takes advantage of the latest pension legislation to offer a comprehensive Sipp option. It fits in well, although it is a fairly bog standard James Hay product. The plan is only designed for Inscape to sell direct to the market and is not likely to be offered by the IFA sector.”
Wingar says: “Sipps are becoming more popular at the moment, because of their investment flexibility and control.”
Richardson says: “The plan fits into today's market for anyone not wanting a standard off-the-shelf pension.”
Moving on to the type of client for whom the product is suitable, Flowers says: “The plan will work for everyone – on the surface. However, as it is marketed by Inscape and requires them to quote a personalised fee, who knows?”
Richardson says: “This is for someone interested in an individually tailored pension portfolio, that is, someone more concerned about actual fund growth rather than changes which the media seems to be focusing on at present.”
Parrott says: “Sipps are the domain of the more sophisticated investor, and also tend to attract those who are paying larger premiums. They also appeal to those with larger transfer values from other pension arrangements. I would be surprised if this Sipp attracts many of these clients.”
Turning to the main useful features and strong points of the product, Richardson points to the James Hay name, while Flowers says: “The plan has well-written literature. It has mostly simple explanations, with the occasional piece of gobbledygook like 'beneficiaries may include a new spouse of the spouse.'”
Wingar also indicates that the James Hay name is a plus and Parrot adds: “A useful point is the involvement of James Hay, which I have found to be very good at its role. There is also the ability to appoint a discretionary fund manager at relatively low premium levels, although it is not clear at what cost. Some investors may be attracted to this.”
Looking at the drawbacks of the product, Richardson says: “The plan is not a full Sipp at this stage, as it does not mention property transactions.”
Flowers says: “There are no disadvantages really, except that you can only get one as an Inscape client and until that point you don't know how much it is going to cost you.”
Parrot says: “The plan does not appear to make the most of Sipp flexibility as far as the investments are concerned. Given the reason why most clients effect Sipps, I see this as a major flaw.”
Wingar says: “Large contributions are required for self investment to have any worthwhile effect.”
Commenting on the flexibility offered by the product, Parrot says: “The contract flexibility and benefit options look very flexible and attractive. However investment flexibility looks poor from the literature provided.”
Richardson says: “The product comes in 1,000 segments – all very standard!”
Flowers thinks that the flexibility is very good as it makes full use of current legislation, while Wingar says: “The flexibility is great, but this is part of the appeal of all Sipps.”
Moving on to the range of investment options, Richardson says: “It is not clear to me exactly what is on offer.”
Parrott says: “The options are very limited according to the literature. Everything points to Inscape acting as the discretionary manager, whereas most Sipp clients look to incorporate a wide range of investments via many fund managers. Surprisingly there is no mention of property investment, which is extremely popular via Sipps or other allowable investment assets.”
Flowers says: “I cannot comment on the options as Inscape won't publicise them outside its 'client experience.' This is a shame as this would be the interesting bit.”
Looking at the reputation of Inscape, Flowers says: “It is helped by the Abbey National name, but is too new to have established a reputation.”
Richardson thinks that most people have never heard of the firm, while Parrot says: “I would be very surprised if any clients had heard of it. Ultimately Abbey National is well known but is unlikely to be associated with pension or investment expertise. I think it will struggle against established and better known providers.”
Identifying the main competition to the plan, Richardson says: “Competition will come from most full Sipps, such as those from Jupiter for a start.”
Flowers says: “James Hay has other, equally good, plans that are available through IFAs,” while Wingar identifies Sipps from Winterthur and Merchant Investors.
Parrot says: “This will face competition from most established Sipp providers. I still fail to see why any investor would use this when they could go to James Hay's own select Sipp, which offers complete investment choice and Sipp flexibility at extremely competitive cost.”
Addressing the issue of whether the charges are fair and reasonable, Flowers says: “Ah, there's the rub. There is nothing to explain the charges in the literature and when I called Inscape they would not tell me the costs without going through the 'Inscape client experience.'”
Parrot says: “It is hard to say. There were no details in the literature. I find this totally out of line with other providers in this day and age and I can only wonder if they have something to hide.”
Moving on to the product literature, Richardson says: “The literature is basic, boring and with no real details. Where is the technical blurb?” Wingar agrees. He says: “The literature is very bland but with simple explanations.”
Parrot says: “The brochure is not very inspiring. Sipps tend to be seen as up-market pension products with high standard literature. This product literature is just drab. Ironically James Hay produces some of the best Sipp literature available on its own product range.”
Flowers says: “It is mostly good, although I could not figure out the partial person on the picture on the front cover. It would be useful to have it available on disc.”
Summing up the product, Parrott says: “I am sorry to sound negative, but overall I feel that this Sipp misses the mark. It gives a Sipp wrapper but lacks the key attractions for most Sipp clients, which are investment choice and flexibility.”
Finally Flowers says: “The two most important factors missing from this product are information about the investment story and an indication of the charges. The product literature assumes that the Sipp is going to be invested in Inscape's portfolio, which rather defeats the object of the investment flexibility of a Sipp!”
Helen Richardson, Managing director, Bell Financial Planning, David Flowers, Director, Ronald Blue & Co, David Wingar, Partner, Courts Independent Financial Management, Jeremy Parrott, Managing director, Birnbeck Finance.