A number of SIPPs are flouting the ‘open architecture' environment which has developed since A-Day, Fidelity FundsNetwork says.
Based on Defaqto data, the firm says up to one in every eight providers of the specialist pension products still require a minimum investment into insured funds.
It says investors should be “free to choose” where they invest their SIPP and take advantage of the benefits an ‘open’ SIPP offers.
In addition, FundsNetwork says “anecdotal evidence” suggests advisers are failing to see any benefits for their clients as, in some cases, as much as 54% of their money can go into insured funds.
According to Defaqto data, SIPP investors with providers such as AXA, Friends Provident or Zurich can expect a minimum proportion of their SIPP investment to go into insured funds. This can be wide ranging – anything from £1,000 for some providers to £75,000 for others.
Fidelity says it defines an open SIPP as one which does not have a minimum fund allocation – such as a minimum fund subscription – requirement.
David Dalton-Brown, head of Fidelity FundsNetwork, says: “In our post A-Day landscape of flexibility and open-architecture, it is surprising to see that so may providers still continue to put minimum fund requirements in place.
“Investors should be free to choose where they invest their SIPP and take advantage of the benefits that a truly open SIPP can offer.”
FundsNetwork says a small survey it has conducted suggests nine in ten advisers feel requiring a minimum amount of the SIPP to be invested in insured funds, or limiting the investment choice available is not beneficial for clients.
It says nearly half of those questioned (46%) believe clients should be given the greatest choice of mutual funds possible for their SIPP, while a further 42% think restrictions are unhelpful, while a small proportion – 3% believe it actually makes the investment decision harder. Just 7% of those questioned feel the restrictions help in some way.
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