Martin Tilley, pension consultant at Dentons Pension Management, has hit out at rival James Hay for providing a poor deal for customers on its SIPP cash accounts.
The attack comes after Defaqto revealed the average interest rate on SIPP cash accounts is only 0.21% on £5,000 and warned rates can vary wildly between providers.
Last month, James Hay, owned by IFG Group, announced the launch of a new cash panel service available to its SIPP and wrap customers, providing cash accounts from Allied Irish Bank and Cater Allen Private bank.
Richard Mattison, business development director at James Hay, said at launch: "The aim of the panel is to give access to the best rates available at the current time."
The Cater Allen account, when accessed via a James Hay SIPP, offers a 1.15% AER on a £50,000 fund for six months, or a 2.65% AER for 12 months.
However, Tilley claims this is a poor deal for consumers as the account is available direct from Cater Allen with interest on a £50,000 fund at 1.23% AER for six months or 2.75% AER for 12 months.
He says the difference in interest represents a "lack of transparency" from James Hay.
"The rate for the account with Cater Allen is quoted at 0.10% lower than the rate offered by Cater Allen in the open market," Tilley says.
"Is James Hay saying they have negotiated a rate worse than their clients could get if they went to Cater Allen directly?
"The 2.65% rate is available directly or through any SIPP provider at 2.75%."
Chris Smeaton, head of product development at James Hay, says: "The rates James Hay offer are negotiated at a corporate level and are based on James Hay's significant buying power in the market.
"The rates should not be compared to retail accounts or other high street savings accounts as these will not operate in the same way and are designed for retail customers."
Scottish Widows, Irish Nationwide and Investec were named by Defaqto as having the best value SIPP cash accounts.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress