Six secrets for SIPP success
As more individuals look to take control of their retirement destiny with a self-invested personal pension, SIPP and SSAS provider Hornbuckle Mitchell says Financial Advisers and clients alike should take great care in ensuring the SIPP provider they choose can meet all their needs.
Stewart Dick, Head of Sales, said: “SIPPs continue to offer investors a great way of saving for the future, providing the most flexibility of any pension product currently available in the marketplace. However, increased scrutiny by the regulator and economic headwinds means there is greater pressure to select the right provider.
“Our top tips are designed to help make that decision and place investors on the path to SIPP success.”
Heritage – experience is crucial when it comes to picking a provider. Ensuring that your provider has a deep understanding and proven knowledge of the market will give you peace of mind.
Capital adequacy – you need to be absolutely sure that the provider you choose will survive the regulatory changes and be in existence for the duration of your retirement so looking at their financial strength is essential. We believe the proposed capital adequacy rules are absolutely right for the industry and protection of consumers. SIPP providers should be more than capable of meeting those demands if they have a strong and stable business and if they can’t, they shouldn’t be in business. Choosing the right provider cannot be done on a whim – you need peace of mind that your provider can be relied upon to protect your retirement savings in the long term.
Support – a provider that offers support is important. Clients often have questions and while Financial Advisers will have an understanding, it can help to have a provider present to explain the technicalities involved and come up with solutions to suit individual circumstances. We pride ourselves on offering client meetings and experience has shown that clients benefit from the extra support.
Flexibility – flexibility is name of the game when it comes to SIPPs. Borne out of a desire to give investors greater control over their pension, a SIPP provider should provide the full range of retirement options. Choosing a product for life is a decision that cannot be taken lightly and it is worth talking through all possible avenues. It’s also very important to know what a provider will allow in terms of investments.
Fees – it may seem obvious, but understanding the fees and exactly what they entail is vital. When it comes to certain assets, such as commercial property, providers may use “time-costed” so it’s worth knowing what a particular transaction involves. Making sure the fees are clear from the outset can prevent you from receiving a nasty surprise further down the line.
Small print – as the saying goes, “the devil is in the detail.” Be careful to read the small print concerning charges and requirements. Some providers stipulate that you need to use their professional connections or risk incurring extra costs. Clarity around costs and knowing exactly what is expected of you and what the provider will offer is invaluable.