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.