15 Percent SIPP Commission Warning

15 Percent SIPP Commission Warning.

A recent Financial Ombudsman Service (FOS) case against a HSBC adviser has highlighted the scale of fees that can be taken via SIPPs.  In the case, the adviser took £9,000 commission when the total payments into the SIPP in year 1 was £5,000 monthy contributions.

Why are SIPPS so popular today?

The adviser can be paid a fee (if advised), commission (if no advice) on the initial setting up of the Self Invested Personal Pension (SIPP)

In addition, as a SIPP invests then in other, wider ranges, of investments, your money is invested again.  In short, the adviser can be paid additional fees (if advice), additional commission (if no advice).

SIPPS offer the potential of a "double whammy"!

Now you know why many financial advisers offer SIPPs or push you onto SIPP platforms.

Are SIPPs good?

Yes, for the right person. 

• If you wish to be proactive with your investments.
• If you require a wider, diverse range of investment choices.
• If you are happy to pay higher managements charges 1.  For the SIPP platform charges itself 2.  For external fund management charges

No:

• If you are not investment minded
• If you wish to keep overall charges lower so that more of your funds invested and not lost in charges

Comment

We do advise on SIPPs.  We arrange many SIPPs each year - but we charge a set fee, no hidden "double whammy" fees.

For many clients we usually arrange a pension scheme that starts off with extremely low charges, but if you then wish to expand your pension to SIPP or to flexible drawdown you can.  Our view is SIPPs are great products but do not pay for facilities that you will not use or do not need at present.  Contact us for SIPP advice.