SIPP take up increases as advisers capitalise on extra freedom

Research by the LV= flexible retirement solutions business has revealed that more financial advisers than ever are using the freedom that Self Invested Personal Pensions (SIPPs) allow their clients post A-Day.

Two years on from Pensions Simplification, and a year after SIPPs became a regulated product, the survey conducted amongst 250 financial advisers highlights the increased take up of SIPPs. The research shows that since April 2006:

Almost a third (30%) of advisers who previously did not undertake any SIPP business have now begun advising and completing SIPP cases;
More than one quarter (27%) have increased the amount of SIPP business they are doing on behalf of clients.

Furthermore, advisers who were already conducting SIPP business pre A-Day have seen notable increases in the numbers of clients:

Nearly one in four advisers (23%) stated that they had seen a fair increase in the number of SIPP clients post A-Day;

Nearly one in ten (9%) advisers stated that they now have ‘a lot' of SIPP clients post A-Day.

Ray Chinn, Head of Pensions at LV=, comments on the surge in SIPP sales following pension simplification: "It is certainly encouraging to see an increase in the interest in SIPPs shown by advisers, especially as there had been some concerns that not enough advisers were exploring the SIPP options with their clients. The legislative changes post A-Day and the increased confidence of SIPPs being a regulated product have made them more appealing, and they certainly seem to be ‘the new black' at the moment. Where once SIPPs were thought of as niche products, they have now taken centre stage.

"It is important to stress that SIPPs are not suitable for all clients. The interest in them is good news for pension planning in general, but advisers must ensure suitability of the product. In many cases, however, SIPPs can provide a flexible and low-cost option to allow clients to hold pension funds. All financial advisers should be exploring SIPPs as a real alternative. Some of the ‘packaged SIPP products' - linked to investment platforms or offering easy access to Discretionary Management services - can work particularly well in terms of providing investment flexibility while keeping costs down."

Through its Transitions Retirement Plan LV= gives access to a growing range of fund choices, including:

12 funds run by the leading asset management team from LV=;
A range of over 60 directly linked external funds;
A direct link to the Fidelity Funds Network platform; and
A choice of four discretionary investment managers.