SIPP property fees unfair to investors - Suffolk Life

The SIPP provider said it spoke regularly with advisers who wanted to change provider but could not justify the cost of transferring commercial property.

Greg Kingston, head of marketing, said: "It is not just the SIPP exit charges but the costs to transact the property disposal. Advisers are finding that the fees to sell the property from the old SIPP are significantly higher than the fees charged to transact the original acquisition.

"Some of these fees will have been introduced since the SIPP was first established and, of course, the adviser needs to charge for their work too. There's no fundamental reason why it should cost more to sell a property from a SIPP than acquire it - quite the opposite in fact."

In 2011, the firm said it completed more than 320 new property acquisitions but less than 20 of these were transfers from other pension schemes, continuing the same trend from 2010.

Dominic Savage, property director for Suffolk Life, commented: "The ongoing servicing of the property and SIPP may be cheaper and more efficient with the new provider but unexpectedly high exit costs make it difficult to justify a move. This is in spite of all the other involved parties - valuers, solicitors, new SIPP provider - working together to smooth the process and be flexible on costs. The one party in the process that we cannot influence is of course the current SIPP provider."

Kingston said high SIPP exit fees, and higher - sometimes opaque - exit transaction fees for property were hindering investor choices.

He added advisers and investors should question fees that appear to be unclear or not reasonable for the work required under TCF outcome 6 if necessary.

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