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Skandia: Platforms could spell end for Sipps

Skandia says the need for Sipps will fall when advisers are able to manage a client’s pension via a platform.

Speaking at The Platforum V Conference, Skandia UK marketing director Nick Dixon said as the number of products available on platforms grew, they would increasingly be able to accommodate pension schemes.

Dixon said: “If you can manage and advise on pensions on platforms across a wider range of assets they would increasingly replace the need for Sipps because the money can be managed in other product areas and the simplicity of using a platform would displace Sipps or at least force some kind of convergence.”

Although currently annuities are not available via platforms, Dixon said that they should be connected to a platform in the near future through third party relationships, which would give advisers the entire view of a client’s investment and income.

He said: “Annuities should be connected to the platform and if they were, via a third party relationship, then you would have the entire income plan of that client.”

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. David Cowell, Myddleton Croft 13th October 2011 at 3:56 pm

    Does this mean that Skandia and all the other insurance companies are going to drastically reduce their charges and drastically improve their admin?

  2. If it means the demise of James Hay then I for one would be for that. Absolute disgrace of a company that take 4 working days to forward a switch request as standard practise if you don’t use the funds they offer.

  3. SIPPs as a pension type will remain a requirement while assets are held on platforms as the alternative is a pension design that is a non-SIPP and non-stakeholder proposition which will be difficult to position and provide no benefits over a platform-based SIPP (or deferred SIPP).

  4. Gavin – I’m sure you have a point to make, but what is it ?

    Your entry is unintelligible !

  5. Dear anonymous
    It seems a tad excessive that a switch form taking four days should lead to the end of a whole company which currently manages SIPPs for around 40,000 investors.

  6. Surely Skandia have been offering this platform ever since they merged with Selestia? SIPPs are still here … and growing in popularity.

  7. Isn’t this the chap that thought that 8 track tapes and betamax video was the technology of the future?

  8. Mr anonymous, what an extreme view you take on James Hay or are you from a competitor with sour grapes?. IFG have totally transformed this company from a dinosaur to a company that now has a SIPP that is fully on-line and if you choose the new 7IM option then the product is fee free to the client, WOW. This is where my business will be going.

  9. I fail to see how a SIPP can be on a platform. Will a platform SIPP be able to monitor commercial property etc?

    The problem is that people use the term SIPP when they are referring to a personal pension that has access to large number financial instruments (equities, ETF’s etc).

  10. Apart from property purchase most SIPPs are a licence to take money off a clien and it is true the use of a wrap will consign most SIPPs to “Dusty Bin” . It’s strange how blind many adviser can be! The facilities that Skandia offer “free” would be considered revolutionary only a short while ago! Not only will SIPPs die a death but so too DFMs and many small client stockbrokers.

  11. How many “pension wrappers” on platforms offer true full SIPP access to HMRC permitted investments and full SIPP functionality.

    I would wager that most cannot cope with the following;

    In-specie contributions
    unlisted shares
    loans to unconnected third parties
    Offshore funds
    SICAVs
    Genuine Diverse Investment Vehicles
    Scheme Pension
    Flexible Drawdown
    Phased commercial property purchase
    Joint property ownership
    Term denominated assets with periods longer than 2 years
    In-specie payment of death benefits
    Investment grade gold bullion
    Patents
    Overseas property
    Commodities
    Access to over 150 DFMs, stock brokers and derivative managers
    The majority do not have access to SSAS or Family SIPP or Group SIPP

    Yes these are specialist areas but unlike a simple fund supermarket a proper SIPP will offer all of these PLUS access to an online fund supermarket

  12. The truth is that SIPPs are massively oversold by IFAs.

    Whilst most platforms don’t offer pensions which allow for features like:

    * loans to unconnected third parties;
    * direct commercial Property; &
    * direct overseas Property

    but the majority of advisers put the vast majority of their clients’ assets, if not all, stock standard investments: Cash, OEICs, UTs, ETFs.

    The problem is that alot are still using SIPPs for these investments, both on platforms and off, which is pointless. This adds unnecessary risk in the event of default as they aren’t insured pensions and so not covered by the FSCS which these advisers are paying towards anyway.

    Whilst I don’t agree with Skandia (rarely do) that SIPPs are dead, they definitely should only be used when required, not as the norm.

    What’s wrong with advising a client to use an Insured Personal Pension for they’re standard assets and use a SIPPs for their more bespoke investment needs.

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