More than a fifth of SIPP providers are still not allowing consumers freedom of choice over where to invest two years after A Day, research suggests.
A study conduced by private investment syndicator Hotbed found 21% of providers refuse access to private equity, but may allow investment in prisons and hotels.
It says this is despite the Government relaxing the rules on SIPPs two years ago to allow alternative investments such as unquoted companies.
In addition, Hotbed says more than half of the SIPP providers that do permit access to private equity claim unquoted companies has been a growth area for them.
“Not allowing investors to exercise their own freedom of choice within the rules set down by the Government undermines the whole concept of self-invested pensions,” says Claire Madden, director of Hotbed.
“Many seasoned investors who welcomed the chance to actually be able to invest for their retirement as they saw fit when the SIPP rules were opened up are feeling very frustrated.”
Madden adds: “SIPP holders tend to be successful business people who have built up substantial pension pots, and are often attracted by the potential rewards of private equity.
“Some SIPP providers appear to see unquoted companies as just too difficult to bother with and are reluctant to try to accommodate these kinds of investments.”
Madden says the key reason cited for not allowing private equity was the difficulty in valuing companies. But, she adds, International Private Equity and Venture Capital Valuation Guidelines provide a standard that makes valuing unquoted companies “relatively straightforward”.
According to Hotbed, 95% of SIPP providers allow hedge fund investments, 74% allow hotels, and 37% allow prisons.
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