View more on these topics

John Fox: Why Sipps are enjoying a Brexit boost

John fox

Starting a pension is a resolution people tend to make during their summer holiday, not before it.

Some are inspired to act by the reflective mood that tends to accompany days spent lounging by the pool and evenings spent sipping wine and slathering on the After Sun.

Yet a more likely trigger for this sudden pension-saving ardour is the realisation that to have a retirement anything like as pleasant as our week in the sun, most of us need to save a lot more.

So as pension providers, we tend to be busy after the summer break, not before it – as many holidaymakers come home determined to get their pension saving sorted before their tan fades.

But not this year.

June 2016 was our busiest ever June – we opened 53 per cent more new Sipps in the month than at the same time last year – and July is promising to be a record-breaker too.

In the first chaotic days after Britain’s surprise vote for Brexit, many in the financial services industry predicted confidently that the four horsemen of the apocalypse would soon be cantering around the City of London.

A month on, and the dust is settling.

The world hasn’t ended yet, and the horsemen clearly took a Southern train. For now, it’s a case of apocalypse delayed.

There’s a clear link between the current climate and rising demand for Sipps.

In part this is down to the nature of Sipps themselves. Sipps allow clients to have highly diversified portfolios and to choose exactly what assets they want to invest in.

This flexibility and ease of diversification are the main attractions. But their appeal has grown dramatically in the wake of the volatility unleashed – particularly in equities – by the referendum result.

With clients keener on diversification than ever before, it’s perhaps no surprise that many of them have been asking advisers how they can spread their retirement savings across a wider range of asset classes.

For many clients, products which allow clients to hold everything from cash to shares and bonds, and from gold to commercial property, all in a tax-efficient pension wrapper are the answer.

While this immediate Brexit boost is welcome, there are wider implications from the result that make this a crucial time not just for pension providers, but for advisers too.

Pensions are long-term savings products specifically designed to ride out short-term volatility like that seen since the vote. So they were always going to be a good bet to take the current uncertainty in their stride.

Advisers should seize on this opportunity to reconnect with their clients and discuss their long-term saving plans. Clients are likely to be even more receptive to retirement planning advice given the looming danger of inflation unleashed by the abrupt fall in sterling.

There are few backdrops more conducive to long-term financial planning than stock market uncertainty and inflation. Pensions could be set for a purple patch.

There’s no little irony here.

The Government’s carefully planned pensions freedom programme worked wonders at raising public awareness of pensions. But it could be something totally unplanned – Brexit – that now prompts many more clients to take stock of their retirement planning.

Cometh the hour, cometh the adviser. IFAs shouldn’t miss this opportunity to reach out to clients old and new to talk pensions.

John Fox is director of LibertySipp


Wayman-Caroline-FOS-2013 700 x 450.jpg

FOS records surge in Sipp claims

Sipp complaints rose 9.4 per cent in the second quarter, according to the latest data from the Financial Ombudsman Service. The FOS received 427 Sipp enquiries between April and June this year. The watchdog upheld 66 per cent of these. The FOS had 390 in the same period of 2015, upholding 51 per cent. The […]


Talbot & Muir swoop for Sipp and SSAS books

Bespoke Sipp provider Talbot and Muir has acquired the Sipp and SSAS business of the Attivo Group. The deal – for an undisclosed amount – will see Talbot and Muir take over responsibility for 1,070 Sipps and 14 SSAS. The firm’s assets under adminstration now total £1.8bn. Attivo says it wants to focus on its […]


How an FCA investigation pushed a Sipp firm over the edge

Administrators have said the cost of a regulatory investigation into the security of client money ultimately resulted in Sipp provider European Pensions Management going bust. EPM was bought by Suffolk Life last week for an undisclosed sum. In their report, administrators Smith & Williamson said EPM’s cash flow was hit by its decision to stop […]

Pensions Dashboards around the World

Steve Webb’s latest policy paper British savers risk being left in the ‘slow lane’ unless the UK Government takes a more active role in ensuring the successful delivery of a Pensions Dashboard. The report, ‘Pensions Dashboards around the World’, coincided with a major conference that was held on Monday 16 May and brought together experts […]


News and expert analysis straight to your inbox

Sign up


    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