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[ SIPPs ]
A string of court cases has brought into question how much
responsibility SIPP administrators should carry for poor investments
made by their clients, writes Pádraig Floyd
At your own risk
T
he self-invested personal
pension (SIPP) has been
considered the Rolls Royce
of the pensions vehicle fleet
for a number of years now, offering
flexibility for those who want to do
more than just invest in insured
funds. However, recent court cases
brought by disgruntled investors
against SIPP administrators have
somewhat tarnished its reputation.
So, is it still up to the job?
What’s the problem?
The UK SIPP market has continued
to see strong growth, generating
£2.4bn of annual premium equivalent
(APE) in 2017 according to research
from GlobalData. This was a 55 per
cent increase on the previous year.
However, the number of complaints
about SIPPs has also risen.
Complaints tend to focus on a lack of
due diligence conducted by the SIPP
administration company. The problem
arises from these vehicles being self-
invested, which allows investors
considerable freedom as to what they
do with their money.
Some investors who experienced
considerable losses or were victims of
scams felt the SIPP companies could
– and should – have done more to
prevent them ploughing their money
into high-risk assets.
A victim of its own success?
The SIPP model became very popular
after 2006’s tax simplification
watershed, with new products
proliferating. Since then, there has
been clear segmentation of the SIPP
Some investors who experienced considerable losses or
were victims of scams felt the SIPP companies could – and
should – have done more to prevent them ploughing their
money into high-risk assets
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