When change is inevitable, relax and enjoy it

So I suspect many IFAs have been surprised by our current campaign to encourage them to review their SIPP clients’ service needs with a view to switching funds from our flagship Private Client SIPP, to our newer, online product, James Hay eSIPP. And I can almost hear some of you thinking, “If it saves the client hundreds of pounds a year in charges, it’s quicker and easier for us, and they’ll even pay us to do it – where’s the catch?”

Well, the only catch is that there isn’t one, apart from the fact that times have changed and so has the SIPP market. It has moved on from being an extremely wealthy niche market that mostly dealt with pre- and point-of-retirement transfers of very large sums, to its new catchment of clients at the upper end of the mainstream, who are actively building-up their SIPP funds and will be doing so for some time before they are ready to begin drawing their benefits.

The average case size of these ‘second generation’ SIPPs is smaller and, though they can be expected to grow more over the years than their predecessors, their size will be restricted by the lifetime limit. As you would expect, there is a greater emphasis on growth-oriented investment, and on active investment strategies based around retail collectives, rather than the gilts and pooled funds traditionally favoured for income provision.

What this adds up to is a market that is at once service-intensive and extremely cost-sensitive compared with the ‘luxury end’ which dominated for the first decade or so of SIPPs. And, of course, it has become increasingly competitive as new providers have joined in to ride the post A-Day boom.

We recognised early on that the only way to deliver, to this much larger market – and to IFAs – the very high SIPP service standards on which our name was built, is through online management. And, by doing so, we can also safeguard service standards for those SIPP holders whose specialised investment requirements can only be dealt with manually by our highly experienced client teams.

And so we have invested heavily in the development of eSIPP – which was originally launched in 2003 as a ‘budget SIPP’. As a result, it is now a suitable vehicle for the overwhelming majority of our SIPP clients and their Advisers.

It could certainly be cheaper for clients who hold our Private Client SIPP or one of its third party-branded versions. There is no annual administration charge, we don’t charge transaction fees for buying, selling or (unlimited) switching of assets held in the Investment Centre plus there are over 1,300 discounted funds to choose from, including many specialised and institutional funds not normally available to private investors.

Best of all for you as an IFA is that each instruction you place, onscreen in your office, is carried out automatically, immediately, every time. And commission payments are automated too all of which means less administration, less paperwork, and more time focusing on managing portfolios and profitable fee based tasks. Although James Hay doesn’t make a charge for your client switching to eSIPP we will pay you 10 basis points of the value of the assets that are transferred into the Investment Centre, and the sale of the eSIPP entitles you to initial and trail commission.

Private Client SIPP is still our flagship product, in the same way as Rolls Royceis for BMW. Some people want what only a hand-built Rolls-Royce Phantom can deliver,and are ready to pay for it; most discerning individuals, however, would be morethan happy to plump for a beautifully mass-produced Beemer. Quicker, hipper,easier on the pocket – and equally at home in Bond Street or Sainsbury’scar park. Some comparisons are not odious

For more information visit www.esipp.co.uk/switch

By Damien Conway, National Sales Director James Hay