In the News Financial Planner
Christine Hallett, CEO, Options Pensions UK discusses the use of SIPPs by Wealth managers and the need for wealth managers to consider the use of SIPPs in the overall wealth planning for clients, SIPPs have been in the marketplace now for 15 years and have evolved into something completely different from the original intention of how they would be used at the beginning, in the last 6 years it has become clear that a SIPP must have advice; self investment appears to be a thing of the past, however, they still have a place in the world of financial planning.
SIPPs are no longer a vehicle for the wealthy; they are simply another tax efficient vehicle to use when planning the overall wealth creation strategy for clients. Many wealth managers advice clients who are starting to put together their plan for wealth creation in order for them to have a long and prosperous life after the days of earning a salary are coming to an end or to accelerate the retirement plans so those who make it can retire earlier and still have a nest egg from which to draw. The earlier the plan is started the better the chances of the plan succeeding. Remember the saying Fail to Plan – Plan to Fail. There has never been a time when this statement resonates more with so many of us. If we have no plan we may look to a future of discontent!
SIPPs have had a lot of profile in the media and have been under the spotlight of the regulator of late due to the perceived misuse of them, a SIPP comes in so many varieties, it is often unclear as to whether it is a SIPP at all. The FCA no longer welcomes the idea of self investment and that is why it is so important that the clients needing the flexibility of the SIPP wrap that is properly advised on to allow consolidation of other pension arrangements and a diversified approach to investment strategy. The future of a true SIPP is in the hands of the true wealth manager/adviser seeking to optimise the potential for their clients.
The new world of wealth managers have a new breed of clients eager to start accumulating their nest egg and a pension is generally a core part of those plans, the challenge is to work through the minefield of options available and choose a SIPP that is right for the client and will enable them to use the same vehicle throughout the accumulation phase of growth, a SIPP that is flexible enough to accommodate all asset classes, from a range of investment funds and or managers, through to some carefully selected alternatives, and commercial property, a SIPP that can be used to truly diversify across the asset classes available to maximise the growth phase in a tax efficient way.
A SIPP that will give the client and their wealth manager the control they need to adopt different strategies at different stages of the lifecycle of the pension planning process.
Also, when leading up to and planning for retirement, the flexibility of the pension scheme when starting to drawdown from the pension pot that has been built is crucial to an individuals future, whether it is choosing a scheme pension option, they can now take advantage of full flexi access and could potentially withdraw all the pension pot (subject to the tax payments required) or taking flexible drawdown, purchasing an annuity or just phasing the drawdown payments. There is so much to think about and consider it is an advisers duty to make sure they are there at the beginning reviewing the position as you go along and critically there at the end to make sure the choices are known by their clients, the implications of making decisions so that the correct one can be made.
By sensible planning and embarking on a realistic wealth creation strategy working with a professional pension’s partner in conjunction with the wealth manager the world is your oyster. So SIPP it and see….
It is key to the success of the relationship with the client that a specialised SIPP provider is chosen as many do not have the requisite expertise, or experience to deliver an outstanding service and experience for the adviser and their clients. One needs to compare like for like when often we find that adviser compare apples and pears just because it is a SIPP. The shape, capability and flexibility of SIPP arrangements are all so different so make sure the research is well documented and full the right SIPP partner is chosen.
For further information regarding SIPPs contact Options Pensions on 01908 336010 or send your questions or enquiry to email@example.com