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Standard Life hikes Sipp charges by 4%

Standard Life is increasing its Sipp charges for all existing customers by 4 per cent and introducing a £750 charge for new customers who transfer their Sipp to another provider within 12 months.

As of January 1, 2011 all charges for existing customers will increase by 4 per cent and Standard Life will introduce a drawdown annual review charge of £100. This relates to a new review service that will be available at the end of March 2011. The charge will not apply if the review is requested and completed online.

Standard Life will also introduce a £640 charge for customers who want to use their own solicitor for commercial property purchases or sales. Standard says an additional hourly rate may also apply in certain circumstances.

For new customers on or after January 1, 2011 Standard Life is introducing a £750 charge for customers who fully transfer out of the active money Sipp to another provider within the first 12 months. Standard Life says the charge will not apply on life events such as divorce, terminal illness and death.

It is also introducing a £175 drawdown set-up charge for customers who are invested in full Sipp options. It will apply on the first benefit crystallisation event.

Standard Life says it will write to existing customers by October 1, 2010 to inform them of the changes.

Head of Sipp Alistair Hardie says: “Our Sipp offers a value proposition for advisers and their customers which is reflected in the charges. This is only the third time we have increased charges since our Sipp launched in 2004. To give this some context, our one-off set up charge for full Sipp options has increased by £13 and our yearly administration charge by £17, an extra £1.40 each month.

“In direct response to adviser feedback we have introduced several enhancements to our Sipp this year, which include a range of low cost funds, increased flexibility for commercial property purchase and more flexible adviser remuneration. We have a pipeline of further improvements on the way and I’m confident our Sipp remains competitive and market leading.”


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There are 14 comments at the moment, we would love to hear your opinion too.

  1. Another case of a provider increasing their book with “cheap” charges then hiking them up once the customers have been snared! Not impressive at all.
    I will assume that advisers who were lured into this trap start shifting their clients our before the fees are introduced!

  2. It would be interesting to know just what proportion of SIPP holders actually use them anywhere near to the full extent of the investment options they allow.

    We’re only a small practice, but I’ve never yet been asked by a single client about investing beyond a carefully selected and regularly monitored portfolio of Unit Trusts/OEICs. After my admittedly limited experience with SSAS’s, I’m very glad.

  3. How do you explain that to clients?

  4. I’m sure that what they are doing is all well documented and perfectly legal. It always has been in the past when they have made such changes – based upon commercial realities.

  5. 4% sounds like a legitimate increase to reflect inflation but the article doesn’t make that point clear.

  6. My God, I actually find myself in agreement with Julian for once!

    How many clients actually use the features of a SIPP, albeit a hybrid SIPP like Standard’s? Really these ‘sipp’s’ are used as PPP contracts, which when they were low charging could sort of be justified. However, RU 64 et al is there for a reason, and when a provider starts throwing extra charges onto a contract the client will suffer.

    I know a pension guru who has been saying for a number of years that the majority of SHP/PPP’s that were churned into hybrid SIPPs will need to be unravelled. At the time I thought it was the rantings of a cynical tech person, but I wonder if her forecast is about to become reality?

  7. Will SIPPs be the next “misselling scandal”?

  8. Which is the more eye catching headline?

    1. Standard increases charges by less than the current rate of inflation? or
    2. Standard hikes SIPP charges by 4%.

    Next to nothing when an IFA goes from an annual fee of 0.5% to 1%. Should that be reported as:

    1. Fee increase of 0.5%? or
    2. IFA hikes fees by a whopping 100%?

    And no, I don’t work for Standard.

  9. “Exasperated me | 16 Sep 2010 10:18 am

    Will SIPPs be the next “misselling scandal”?”

    Possibly – SIPP’s started out as a niche product aimed at high net worth individuals.

    Over the years we have seen the market “dumbed down” to cater for those with lesser pension pots, some as low as £10k.

    There are so many providers in the market place now that are offering cut price SIPP arrangements that must either be a loss leader or there are other charges that are not clear such as kick backs.

    Running a SIPP is an expensive business due to the plethora of regulations the paperwork involved in setting up and monitoring the vast amount of investments allowed these days.

    I can see a few other SIPP providers following Standard Lifes lead on this.

  10. Paul…your cynical source is right – have a look at the outcomes of the SIPP, WRAP, Platform Thematic Review – IFA’s better start shifting their clients out of these environments unless actual SIPP functionality is not only used, but NEEDED, and NOT available in a traditional bread and butter PPP. It’s not a compliance risk (from an redress and fine perspective) anyone would want to take!!!

    Let’s be honest, there’s a reason Mark Polson ‘decided to leave’, and why there’s now a focus on building a new PP as well as a direct sales channel.

    Standard Life,,,dare I say Average Life?

  11. The halo is slipping – charge hikes – going direct.

    Are you sure all those clients you placed with them are under YOUR control? The sales guys will tell you what you want hear – I wonder what the top brass are thinking?

  12. Interesting comment from: Anonymous | 16 Sep 2010 1:56 pm. I can’t remember which provider it was who a couple of years ago wrote to a bunch of clients who has SIPPs with them to say that they could offer advice cheaper and better than that of their IFA! Or another who when, after advice a client decided to move a bond to another provider the first provider rang up the clients saying ‘are you sure about this?’

    Scary, will providers ever learn that a professional IFA might decide to place certain amounts of a client’s monies with that provider- and the the IFA is NOT an introducer and the client belongs to the IFA?!

    There has always been a view in Life Co’s that IFAs are somewhat a necessary evil, but one that can be roughly controlled by commission and other ‘incentives’.

    One good thing (?) to hopefully come out of RDR is that we can show them that we are a profession and not merely a bunch of ex tied agents.

    Am I totally naive though?

  13. Standard lifes contract has always been reasonably priced, not the cheapest which is fine, as the product features, flexibility and service justify the extra cost. Let’s not forget however that these charges don’t apply unless SIPP and or drawdown are used, and the bare bones contract is very competative in the RDR space (i.e customer agreed remuneration). As for misselling, anyone who has moved their clients into a contract where they are effectively paying SIPP type charges but not using the functionality, i think you’re going to come seriously unstuck. Using a plan like the SL SIPP where you only pay for what you use, i.e mono charged for insured funds, I can see no problem with that. The client is paying the same as any other insured pension, Standard just made the mistake of calling their plan a SIPP instead of something generic like ‘Flexible Retirement Plan’

  14. Gary, I think you are right about features, flexibility, service etc…..all of which are important in a SIPP. However, if, for example we had a few managed funds in that SIPP, then all the ‘reasonably priced’ product is doing is to act as a drag to the growth of the pension pot.

    The additional charges should be incurred by the client for a reason, if not then surely TCF comes into play. If you can get the same managed funds in a SHP, and that is what is right for the client, then why not do that?

    As someone previously mentioned, running a SIPP is an expensive business, and anyone who can run a ‘cheap’ SIPP (especially some of the smaller players in the market) can be slightly worrying….

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