View more on these topics

Sippchoice latest firm to charge customers to meet capital rules

Money-In-Hand-700.jpgSipp provider Sippchoice is expecting investors to help cover the cost of its capital requirements through a fee it labels “FCA capital requirement loading”.

Sippchoice is the second provider revealed by Money Marketing to be charging a fee with GPC Sipp charging members a one-off £215 levy to meet the incoming capital adequacy requirements.

According to a fee schedule, the charge will apply from September 2016 and must be paid annually.

Investors must pay £10 per £100,000 fund value with a minimum annual fee of £25 and a maximum of £250.

The minimum fee applies to funds of £250,000 or less and the maximum applies to funds of £2.5m or more.

Sippchoice managing director Hyman Wolanski says most sipp providers will charge a fee related to the capital adequacy requirements but many may not declare it.

He says: “There is a cost to any business of holding more money. Any business is going to have to, one way or another, recover that cost. It is just a question of whether you do it implicitly or explicitly. Most people will probably charge implicitly and not highlight it in the way we have. We felt it was appropriate to highlight it.”

The FCA’s capital adequacy rules come into force on 1 September and base solvency requirements on the proportion of standard and non-standard assets held by Sipp providers.



Sipp firm forces clients to pay for cap-ad changes

A Sipp firm is charging its members a one-off £215 fee for work it has carried out to comply with capital adequacy rules. In a letter to members, seen by Money Marketing, GPC Sipp managing director Kathryn Taylor says the fee will either be deducted from the Sipp account or have to be paid directly […]


Sipp firms reveal cash margins

Sipp providers have revealed how they split the interest earned on client bank accounts ahead of a 2017 FCA deadline. By April providers must show the margin they retain on cash holdings as a charge on Sipp illustrations. Money Marketing’s research (see table below) shows a wide range in the interest rates firms are able […]


Revealed: The Sipp firms under pressure as capital deadline looms

A worrying number of Sipp providers’ business models, including well-known firms, are unsustainable, new analysis has warned. Research consultancy Finalytiq’s first review of the sustainability of the bespoke Sipp market, seen exclusively by Money Marketing, reveals Carey Pensions, @SIPP and London & Colonial are set to struggle. All three Sipp operators were given the lowest […]

Value for money in DC pensions

The Pension Policy Institute (PPI)’s recent report “Value for money in DC pensions” tries to identify factors by which people can assess whether their pension offers fair value for money (VFM). Fiona Tait provides an overview of the findings. Positive Outcomes It is extremely hard to assess VFM in a pension. Press activity naturally focuses […]


Lifetime Isa – how it works

According to George Osborne “people like Isas – because they’re simple”. Fiona Tait is not convinced… Contributions & bonuses What he said: “From April 2017, anyone under the age of 40 will be able to open a Lifetime Isa and save up to £4,000 each year. And for every £4 you save, the Government will […]


News and expert analysis straight to your inbox

Sign up


There are 2 comments at the moment, we would love to hear your opinion too.

  1. So, I have a TCF question. Is it reasonable to charge ALL clients a cap ad fee? What if I only have standard investments in my portfolio (and therefore don’t, of myself, cause any cap ad impact on my SIPP provider)?

    What if my SIPP provider buys another firm’s business, causing the proportion of clients with non-standard assets (and therefore the cap ad requirement) to rise? Should I pay more because of that, whether or not I’ve been contributing before? My own portfolio and risk profile hasn’t changed, why should I pay more? But, OTOH, should the entire marginal cap ad increase be funded by the acquired clients – is that fair on them?

  2. I think it is probably fanciful to think that this market is not going to have to fundamentally change the way it charges fees from the point of the change in regulation and whether that’s a move to a flat annual levy or something linked to the size of fund, these could be argued to be models imposed on providers by the FCA. I agree that all SIPP Operators will probably be charging their clients to meet new Cap Ad requirements but some will continue to do so in less transparent ways and the bigger ones will certainly make the most of the issues around it in order to fuel consolidation and grown their books whilst further making the shrinking choices available to clients, increasingly uniform in their blandness.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm