Pension News Sipp Simplification ‘confuses’ Customers
05 February 2007
Leading financial advisers have voiced concerns that self-invested personal pensions (Sipps) remain confusingly complex, despite hopes that A-Day – April 6th 2006 – would simplify the schemes.
Sipps serve as a ‘wrapper’ bundling together pensions investments options including trusts, equities or futures – all accredited by the Inland Revenue as valid pensions savings options.
But 85 per cent of financial advisers think more must be done to explain the benefits of a Sipp to customers, a recent study from Cornelian Asset Managers revealed.
“There is a need for a generic campaign to explain the benefits of proactive pension planning,” Richard Allison, business development director at Cornelian, told the Scotsman.
“Simplification has served to confuse,” he stressed.
“Care is required when considering a Sipp, as they may not suit everyone, but it’s hard for consumers when information is supplied in such a complicated fashion,” he added.
Sipp ‘wrappers’ will be regulated by the Financial Services Authority (FSA) from April, which analysts hope will inspire greater consumer confidence.
But others are concerned that many providers have not yet applied for regulatory approval, warning that customers could find themselves covered by an unregulated scheme unless the industry organises itself more quickly.