The Sipp has two investment options. Under the SIM option, investment decisions are delegated to Skandia, which would suit investors and their advisers who do not have the time or investment experience needed to build a portfolio and constantly monitor funds.
The other option, self select, enables advisers and their clients to construct portfolios for their individual requirements. They can invest through Skandias pension trustee bond or MultiFund fund supermarket.
The main differences are that the bond does not allow for regular contributions, the supermarket does not provide access to managed funds from external fund managers and the bond is instantly tax free in most cases whereas tax is deducted then reclaimed under the supermarket.
Standard Lifes new Sipp may provide competition for Skandia despite the fact than Standard Life has no establishment fee whereas Skandia charges 150.
Standard Life does not make administrative charges on the Sipp wrapper for clients who only want to use its Sigma funds platform. Instead it reserves the bulk of its charges for those who want full self investment. For this it makes a 290 initial charge plus an annual charge of 200 or 400, depending on which funds are chosen. However, these charges may be discounted.
Skandias no initial charge and annual charge of 160 or 360, depending on whether only Skandia or external funds are chosen, is simpler and cheaper for clients who want full self-investment. Those who do not want full self-investment may prefer Standard Life.
However, the wrapper charges tell only half the Sipp story and the real cost of both products will depend on how the client wants to use the Sipp.