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Provider offers compensation in a Sipp

Friends Provident has recognised that the current economic uncertainty will do nothing to encourage investment and investors will be even more cautious about making decisions especially when it comes to assessing the stability of financial providers.

This comes in response to the FSA setting out its expectations that providers should give suitable advice to help customers make informed decisions about transferring built up NI insurance rebates into Sipps, in anticipation of this week’s opening up of Sipps to protected rights.

Commenting, Jeremy Ward, head of pensions marketing at Friends Provident says: “In some scheme types, the level of compensation which could be paid to the investor should the pension provider or operator collapse is far lower than that afforded to investors via an insured Sipp”.

Given the events of the last few months with large multi-national banks failing, investors have become increasingly conscious of the need to protect themselves against such a loss, he adds.

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