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Pay as you go Sipps to ensure fairness

Platform providers should opt for a pay-as-you-go charging structure on Sipps to ensure that clients are only charged for the functionality they require, says Scottish Life sales director Jim Smith.

He believes providers should only charge clients for full Sipp flexibility if they use it rather than levying a higher asset management charge on clients who are only really using the personal pension element, which he claims is the case on Stand- ard Life Sipps.

He says: “You should only pay for the self-invested functionality if you use it and, if the starting point of pricing for the product is higher than it needs to be, I think it could create potential problems.”

Ascentric head of sales Shaun Sandiford is also in favour of menu-based charging.

He says: “As the number of Sipp providers has grown and the products have diversified, the traditional Sipp charging structure has had to change, meaning companies, like our own, have taken the decision to offer menu-charging.”

But Standard Life head of pensions policy John Lawson says: “If the client does not intend to use all the additional functionalities on the Sipp – self-investment, income drawdown or borrowing money – then what are they doing in it in the first place?”

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