In his latest blog, Ray discusses ‘When is a SIPP not a SIPP?' and reacts to the latest developments in the market. You can also ask Ray questions on SIPPs throughout the month.
Welcome to Ray's Chinn Wag, which examines the latest developments in the SIPPs market and allows you to ask Ray questions on how to make the most of your client's self invested personal pensions.
Ray's latest Chinn Wag
When is a SIPP not a SIPP?
9th December 2009
Amusing to see the market getting stirred up this week about Standard Life's decision to re-enter the personal pension market (and move into the ‘full' SIPP) market with plans for launch of three ‘lifeplans' in early 2010. Response has been as expected with much gnashing of teeth about what is / isn't a SIPP and whether Standard Life are treating their customers fairly. Aviva in particular have waded in with some ‘cheap shots' which really don't do the industry any favours. My view - good on Standard Life. At least they are trying to identify market segments of customers who are more likely to have specific needs and build products that fit. Whether they actually need three ‘products' to do this is not quite so clear to me..... But at least they are trying to be more transparent - as they have been as one of the few companies (along with LV= and L&G to my knowledge) who use realistic projection rates on illustrations. Rather than knocking other companies, some of the providers and advisers out there would really be better focussed on making sure what they have to offer is clear and easily understood. As to what things are called and whether one, two or three ‘lifeplans' are right, I've been here before - ‘a rose by any other name would smell as sweet' - provided the smell is sweet of course!
7th December 2009
Ray posted -
A recent survey by Investec, looking at SIPP investors approaching retirement has been getting a lot of publicity in the press recently. I'll leave you to do your own Google searches, but in simple terms, Investec are saying that too many SIPP clients are underweight in cash as they get close to retirement - leaving them very over-exposed to any stock market downturn - of the kind we saw this time last year, at a time when they'll find it difficult to recoup any losses before they get their carriage clock and switch off their PC for the last time.
Trouble is it's not that simple. If clients are happy with pure cash then this works, but moving to less adventurous funds / asset classes over time can pose problems. We've been doing some work here at LV= regarding the make up of of so-called cautious funds, and how they match up against the risk profiles. An online blog probably isn't the place to go into detail on this - but suffice to say that a lot of investment funds aren't quite as ‘cautious' as they say they are.
The message that comes through loud and clear is that it's essential for advisers to look more deeply at the fund selection and make sure they are using tools such as risk profiling when considering a clients investment strategy approaching retirement.
Must try harder...
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