April 2008

SIPP Roundtable: Defining SIPP

HELEN MORRISSEY: SIPPs have been regulated for almost a year. How has the market adapted to this?

JOHN MORET: Well it's adapted in that we know that there are 150+ operators who are now regulated. Obviously there's been speculation about consolidation but it's happening more slowly than some might have anticipated. However, we haven't yet had a year of regulation and there have been signs that some companies are starting to move in that particular area.

I'm not convinced that the FSA actually fully understands the implications of the new regulatory environment. I think there are some aspects of the regulatory framework that certainly haven't become as transparent as they might be. I'm thinking about some of the regulations around client money and reconciliations, and there is a view that there is now a level playing field. That isn't the case. There are different levels of capital requirement and different levels of investor protection, depending on your regulatory status. I think that's just one example of where there's still not a total understanding of the consequences of regulating SIPPs as a packaged product.

IAN PRICE: I'd agree with John actually. I thought it would consolidate, I think it has to. I'm starting to believe, slowly but surely, that the level of service we're getting is reflected by the fees that are being charged and at some point SIPP providers are going to have to reassess the fees. It is clear that because of such things as regulation and a huge increase in business that the levels of service that some SIPP providers are now providing is not at the level that clients expect. I am sure that this continued pressure to reduce fees has to stop as clients are prepared to pay for the right level of service. What they are not prepared to do is pay a fee that does not provide an adequate service.

From a distribution point of view, regulation hasn't made much difference. When advising a client, if it's regulated or non-regulated, it shouldn't make any difference about giving good sound advice.

ELAINE TURTLE: What was the FSA trying to achieve by regulating, because I agree, the good advisers that were recommending the SIPPs were doing all the required paperwork. Regulating us as SIPP providers didn't make a huge difference either. So I don't quite see what was gained. However, I think the market has adapted to it but I think everybody will be looking at their costs, because we've now got to churn out more bits of paper than we did before, which costs us more money. It frustrates clients because something just can't be done because a piece of paper has to be completed and filled in.

CLAIRE COURT: We've always treated SIPPs and SSASs as regulated products anyway so there was barely a ripple last April. However, I think there are some practitioners out there for whom it was a big change. I would agree that it's causing delay with clients; they don't understand why we have to issue these pieces of paper.

JULIE MULVANNY: We're in a slightly different position in that our SIPP was always regulated because it's a private fund with Suffolk Life. So there was no change for us last year, or very little change. Where we are seeing an issue is on the illustrations. You're issuing illustrations for the sake of it because they're fairly pointless, and we're consistently having advisers coming back to us and saying 'What is the point of this, because in no way does this reflect what's actually going to happen?', and we're saying 'Well we just have to issue it I'm afraid'.

IAN: I think what's interesting is to find out what the consumers think, and we never do. We sit here very nicely discussing these matters but actually if you were a consumer with a SIPP now, compared to a SIPP a year ago, what difference does it really make to you deep down, apart from more pieces of paper, more questions to advisers, more questions to the providers. What has it actually done for the consumer?

CLAIRE: I think the FSA wants us to be very clear and concise with our clients, but actually I think it's had the opposite effect. They don't want reports bulked out with loads of bits of paper.

STUART RUSSELL: I think it would be useful if you actually could get feedback from the consumer, because from our viewpoint there's minimal change with regulation. We ran our SIPP before as a regulated product anyway, so there are very few changes. One point that ran through our mind when we were looking at illustrations is that it seemed like a pointless exercise. You give a raft of paper to a client, and he's, one, not going to read it, and two, even if he did would he actually understand anything that's in there? I think it's a pretty wasted effort.

ELAINE: Well we had one where we had to do the illustration and it was based on the transfers that were coming in. We'd been given a figure, and we based it on that. When the figure came in it was different, and the adviser and ourselves had all sorts of hoo-ha with this client, because he doesn't understand why the illustration said one thing while we tell him another?

STUART: We're finding that just about every single quote we do is, if you like, custom-built to suit that particular client. It takes a considerable amount of time to actually try and get the information out of the client to produce the illustration.

CLAIRE: You've also got the annual illustration for those in drawdown. You have to customise those again.

STUART: It's a very time-consuming process.

JOHN: I come back to the point about the level playing field, and I don't believe that the majority of advisers, and certainly the majority of clients, have any clue, despite the fact that the SIPP is regulated, just what the compensation arrangements are, nor what would happen in the event of, say, a default. Say you had a SocGen-type situation, just what would the consequences be if you were in a SIPP. I think the problem is the consequences would be different depending on the legal structure of your SIPP, and it will only be when something like that actually emerges that perhaps the proverbial will hit the fan. There's an education process required. We looked at this very closely, because we've been regulated as a life company. The capital requirement as a life company can easily be about 10 times what it is as a trust-based scheme, and yet how do you get that across to advisers, and what is the significance of that? So I think there are some issues there that really haven't yet had a proper airing. Linked to that there is this whole area of responsibility for the action of the investment managers, it's the extent to which you rely on a third party for information. If you're an operator of SIPPs you can elect, depending on your legal structure, to rely totally on a third party. I'd question how many companies that are doing that are doing proper due diligence on those third party investment managers?

ELAINE: So you're arguing for more regulation?

JOHN: No, I'm not. I'm arguing for consistency. Why should a life company SIPP actually have a requirement, capital-wise, massively greater than a non-life company SIPP? What's the thinking and thought process? It's a consequence of the way the product's been regulated, and a consequence of legal structures.

ELAINE: Because most of the life company ones are probably invested - I'm not saying yours is - but a lot of the life company ones are invested in their own funds.

STUART: Not a proper SIPP.

ELAINE: Yes, not a proper SIPP, and you've taken a choice, you've gone down a route of becoming an insurance company or a life company, and it's that knock-on effect. There's lots of us who never wanted to do that, and I just think the problem with a level playing field is it'll never be that you lot come down to our levels, it'll be asking everybody else to go up to yours. That will end with a consolidation in the market, but it will mean what actually is a SIPP will stop becoming a SIPP and people won't get the freedom to do the things that they want to do.

JOHN: I don't disagree with that at all, but what I'm saying is I don't think the regulatory framework actually reflects that at the moment. I think it's unhealthy to have a situation where there is ignorance about the implications of the regulatory framework.

ELAINE: I think again if you asked most members of SIPPs did they know if the product was regulated or not, I don't think they could tell you. The FSA is meant to be protecting the member, but I don't think it's working. If you take Northern Rock, the majority of people didn't realise that their cash on deposit wasn't protected to the extent that it was. I don't know about everybody else, but we're certainly finding instead of half a million going into one bank account, they're wanting to split it among lots, because the penny has dropped with a lot of people that the compensation is not there like everybody thought. We get asked, 'Well how safe is Hornbuckle Mitchell?' At the end of the day I say to them 'what you've got to be looking at is how safe is where you're putting the money', because they're not actually putting the money in anything that is Hornbuckle Mitchell.

JOHN: Maybe - but I'm saying I don't think that the consequences of regulation have been properly thought through. The fact is we have two regimes depending on whether you're deemed to hold client money or not.

HELEN: I was quite interested in that point you made about relying on information that you get from third parties. What kind of steps can advisers take to mitigate that kind of risk?

IAN: Holding good records themselves definitely helps. I think you've just got to make sure you know where every bit of your clients' money is. That's where the adviser adds value as well.

ELAINE: We issue an annual valuation and we quite often get the clients direct phoning us saying they haven't had a valuation yet but we actually sent it to their adviser three months ago. So you do wonder after producing all this paperwork how many members are actually receiving it.

IAN: The advisers I deal with are very good but you do hear of the odd case here and there.

HELEN: If we move on to the issue of consolidation. It was widely predicted that we will see consolidation among SIPP providers, especially smaller firms as they get pushed out of the market. Are we seeing any evidence of this or are we still a little way down the line from there?

STUART: It's certainly going to happen, but it's not happening an awful lot at the moment. Hazell Carr has recently launched its own SIPP, but until this point our main SSAS and SIPP business was driven by acquiring closed books of SSAS and SIPP business, and we haven't seen a marked change in the number of SIPP books coming up for sale. Obviously we are ready when more of these books do come up for purchase.

IAN: If you look at most reports that come out, they reckon between five and six providers have got 80% of the market. That speaks volumes to me. You can't have a market that skewed without there being some casualties along the way. When you think of how few SIPPs some firms must run then I don't know how they do it.

ELAINE: They're doing it through their fees aren't they? You could be paying £1,000+ a year for a real bespoke SIPP. If somebody's doing that then they don't need that many SIPPs to run them successfully and make money.

JOHN: The actual operation is only one part of the income or cost. I just struggle to see how the market can sustain profitability with more than perhaps a dozen operators.

JULIE: The other push towards consolidation is the platform argument. Ultimately to be cost-effective on SIPPs as these volumes go up you have to have some form of technology as you have to automate some of the processes. When we were setting up our SIPP, one of the key requirements was that a lot of it could be automated and that you could get valuations online, real time values and things like that. The problem with some of the more boutique SIPPs is whether they have the funds to develop and maintain these platforms.

ELAINE: Some of the small SIPP players have developed their own software and it's probably a lot better than anybody else's, because it's for that niche market.

JULIE: I think if you have scale you'll be able to continue developing that and continue having it customised. If you don't get the scale, that can become a very expensive overhead.

CLAIRE: It comes back to service again, doesn't it? A lot of clients want to deal with a real person rather than having a call centre approach. I think there's room in the market for both types. There's the insurance company SIPPs which can be very automated and you won't speak to the same person twice. With full SIPP offerings our administrators have a wonderful relationship with some of our clients.

JOHN: A big issue, certainly for us, is this balance between service and cost. If you just look at, say, equities we deal with probably 150 different investment houses. In the ideal world we would have electronic data feeds with all of those investment houses. In reality that is just impossible to achieve and it's not cost-effective, so you go for the 80/20 rule. So we have electronic links with about 30 of those, and we get all the investment information automatically cutting out all the paper. But if you're dealing with paper and you're not pricing for that dealing with paper, you will lose money hand over fist and ultimately your business will fail because you can't make money out of manual-type processes. I understand what you're saying, Elaine, about the basic system, but it isn't just the basic core system, it's actually having an open architecture-type structure that will enable you to suck in this information and feed it back out again. That's where the bulk of the market will go, because SIPPs are now seen very much like personal pensions. There will still be, I think, room for the boutique-type SIPP, but I think the investment in systems in the fullest sense is a significant investment and that's why I think the majority of the smaller players will actually struggle to compete in that market.

IAN: Most of the clients we deal with are at the top end of the market. If you're charging £600 or £1,000, it doesn't mean anything to them. What they actually want is the right service at the right time.

ELAINE: Which might mean consolidation might come in the bigger firms rather than the smaller firms. The guy who charges £1500-£2000 a year can if he is giving a service that the clients are happy to pay for.

CLAIRE: The client may have quirky investments that need extra attention.

IAN: It works provided the client gets a service appropriate for them. We do try and shoehorn everybody into the same box don't we; 'Right, you're a SIPP, therefore we charge that'. In fact there's some very sophisticated clients who need to be charged more. You have to have a sensible conversation with these people so they know what they're getting for the money.

CLAIRE: We keep time records like an accountant or a solicitor, and that is a really fascinating exercise, because you can see which clients are profitable and which ones aren't. After a couple of years you can have a conversation with a client about 'Well actually this is what you're getting, this is the time it's taking' and we can actually address each one individually which you can't do with the big scale.

JULIE: I think there is a big argument that you get what you pay for. I also think that there is space for tiered charging structures. You pay the full charges if you're going to access a full SIPP, but actually if you only want a personal pension with a fund supermarket, you just pay much simpler charges.

STUART: A lot comes down to product design. Having very recently been through a product redesign I believe one product properly structured should be able to do exactly what you're saying.

JULIE: This addresses one of the FSA's concerns over whether SIPPs have been sold with lots of bells and whistles that consumers won't actually use.

HELEN: I was wondering how much scope you think there is for new providers coming into the SIPP market? A company called SG Hambros has decided to launch an in-house SIPP. They said they used to recommend SIPPs from external providers but they'd actually started to encounter problems with falling service standards coupled with high transaction charges and reluctance by some SIPP administrators to accept offshore investments. So you are getting people saying 'Well we're having these problems with the service that we're receiving, we're going to do it ourselves', how much scope can you see for that going forward?

CLAIRE: We're an IFA, but we have our own SIPP as well, and our advisers have to show very carefully that they've considered the whole of the market before they use ours. So that will be interesting, whether they just start issuing a carte blanche instruction that 'you now have to use ours'.

JOHN: I think they are very niche so I suspect in any business plan their volumes would not be that large. I can understand they think they can provide a better bespoke service for their clients but I can think of only two companies in that space that have really been successful in running their own product. I think you're absolutely right in what you say about this conflict situation, it has to be very carefully managed. It will be interesting to see whether in two or three years time their expectations actually turn out to be fulfilled.

JULIE: I think the other way of doing it is what some of the life providers have done, is outsourcing some of the services without doing a white label. The problem with a white label is that you'll lose control of it, it's not your product, and you can't fully integrate it into your personal pension.

HELEN: If we move on to the next area of the agenda, which are growth opportunities for the SIPP market. Where do you see the main growth opportunities for the SIPP market going forward?

JULIE: I actually think the biggest area is the commodity SIPP. I think that's possibly where most of the money that's gone into SIPP has gone in the last few years. I do think it's consolidation of other plans though rather than new money. Certainly 70% of our business is transfers that's going into our personal pension platform, and that seems to be replicated when you look at the ABI stats. It's slightly difficult, because there's a number of big players now that don't feed into those stats, so it's difficult to see where all the money's going. I do feel quite strongly that we should be clear about what is a SIPP, because I personally don't think that personal pension with a fund supermarket bolted onto it is truly a SIPP, and I think that causes a lot of ambiguity in the market.

IAN: One thing for me is that since A-Day I've seen a lot of top end clients suddenly paying in some serious contributions. So there is consolidation, but there's also new money coming in. I would agree 100% that at some point somebody in this industry has got to say 'Right, let's define what SIPP is', because, if not, we're all going to live to regret the day that we don't. If you go to any analyst meeting they always say 'Well how come your SIPP isn't the same as Standard Life?', so you spend about three hours going through it all.

ELAINE: There are so many people that come to us thinking they had a SIPP, but suddenly when they wanted to do a certain investment they found that they really didn't have one. I think that's where the public gets frustrated. To be fair, I don't think everybody that gets a SIPP should have a SIPP. I think that's another problem, that people read the Sunday papers and think 'I should have a SIPP, it's the new in flavour'. There's a lot of people bought into SIPPs because they wanted to buy a commercial property or they wanted to buy land, and then when they came to do it they found out they couldn't.

JULIE: The problem with that of course is reporting as well. We would say our product is a personal pension, even though it has a SIPP option. The exact same product from a competitor will sell it as a SIPP and report it as a SIPP. So the stats are opaque, it's very difficult to tell what actually is a personal pension and what's a SIPP.

JOHN: It is back to the regulations isn't it? It was decided to regulate SIPPs as personal pensions, and so the confusion starts there. So it's not too surprising that providers have adopted that model.

HELEN: We've got a question here on the agenda with regards to protected rights and how we see that issue developing going forward. Suffolk Life launched its Master SIPP last October - so if you can tell us a little bit, John, about how you can see that space developing.

JOHN: Well it's gone extremely well for us. In terms of information I can pass on, around half of our new SIPPs are actually now coming with protected rights attached. In terms of the average fund, it's around £50,000 but with some very big funds, a couple in seven figures. I think there is a huge ignorance about the whole subject of protected rights, partly because a lot of those rights were built up in the early years and people have just forgotten about them.

ELAINE: What I see is a lot of people putting protected rights money into their existing SIPPs. The number of transfers that come into us where we have to go back to people and explain there's an element of it that's protected rights that has to be left behind. How do the advisers deal with trying to explain that to Joe Public? Certainly a lot of people using SIPPs coming up to thinking about income drawdown want to consolidate everything in the one place, so they've got the one product to retire from. They can't get their heads around protected rights. Then you've got the other problem, which is the worst one, where it's money purchase schemes, where they won't allow the non-protected rights to go without the protected rights.

STUART: Just intuitively, you'd expect that sort of relaxation on the protected rights to be particularly attractive to the proper SIPP member, the guy who's a high net worth client who's actively using his SIPP. I imagine at the moment it must be causing a bit of grief to be able to actively manage their SIPP and then they have this pile of money sitting somewhere else where they just can't do it.

ELAINE: I want to put my protected rights in my SIPP. Why would I want to keep my protected rights where they are in an insurance company when I've got my own SIPP and I can do my own investments? I'd much rather have it all in one pot.

JULIE: Our product has protected rights, but only into the insured funds, but it is all within the exact same scheme. It has been an uneven playing field, and we had the foresight I suppose at the beginning to look at exactly where we thought the market was going. We wanted something that could have all the bells and whistles, protected rights, non-protected rights, SIPP, drawdown, all in one product that the client could do what they wanted with. So we're fortunate that that's gone where we thought it would go. From an adviser's point of view though what they tell us is that they are hugely frustrated by having to leave protected rights in a separate product. You can't even get them in for the income drawdown. Why does a client have to buy an annuity for the protected rights in some instances and do income drawdown with the rest?

HELEN: Is this an issue that you deal with much?

CLAIRE: I think yes, we've got a number of clients who would like to include their protected rights in their existing SIPPs. We also think there's going to be a massive growth in DB or employers with DB schemes that are going to offer enhanced transfer values to perhaps get shot of some of their deferred liabilities. I do wonder whether SIPPs are right for those people, and whether there'll be a lot of people who are coming out of DB schemes with enhanced transfer values who will be sold a SIPP, when actually it's either not a SIPP or it's not appropriate for them.

IAN: I just think it's back to the key point - is it right for the client?

JULIE: I think at an extreme you could say that a client is not being treated fairly, not by the adviser but by the regulations that are in place. They will be forced into buying an annuity for the protected rights pot because it's not big enough to go into a drawdown on its own.

HELEN: Well if we move on to the whole issue of SIPP suitability. The number of SIPPs being purchased is continuing to grow pretty quickly, and obviously on the one hand it could be a good thing as it demonstrates people are becoming more engaged with their pensions. Then on the other side it could just be that people are reading about it in the papers and saying 'Right well that sounds like a good idea, I want one of those'. What do you think about such a rapid growth in the SIPP market? Is it necessarily a good thing or not?

IAN: Anything that drives consumer awareness about pensions has got to be seen as a good thing for all of us. That's a definite big tick to me. I know exactly how many SIPPs we did last year and I'm very happy with the number we did. If you look at the clients we've got, you think 'That feels right'. Then I go outside and look at the papers, and you think, 'What's everybody doing?' That's the bit I still don't understand, because at the end of the day, a SIPP is right, as long as the client fully appreciates what they're buying. I'm absolutely stunned by the increase in direct offer SIPPs. If you look at one of the growth markets as being these direct offer SIPPs, I find it quite interesting, because I come from a background of advice, advice, advice, and yet the direct offer proposition seems to be growing so quickly.

HELEN: By direct offer do you mean web based SIPPs?

IAN: Yes.

ELAINE: As a result of regulation we've stopped doing the direct offer SIPP. We didn't get lots of requests, but you did get a few. Our website now says we won't deal direct with people.

JOHN: I think the proposition's just completely different really. Whether that's the way in which the investor interpreted the proposition, I'm not too sure, but I think these online, no-advice products, are being promoted virtually hand in hand with ISAs. I think there's a school of thought that the moderately intelligent investor can choose an ISA for himself, so why can't he choose a pension for himself? I think that's what we're actually seeing happen. Whether it's healthy, I think that's another debate really.

HELEN: If we move on to the second question, which is the media does talk a lot about the possibility of SIPPs being sold to people that just don't need them. What kind of evidence are you seeing of this and what can the industry do to address the issue?

STUART: I think it all comes down to product design, and also the advice that goes with it. Provided the SIPP is properly structured allowing people to move up the complexity scale as it suits them then that could suit most potential pension investors. I think the dangers really come in the risk that the client actually ends up with the wrong product and also the risks associated with taking transfers into it. If you want to pick on the transfer point, for example, if a guy is a member of a defined benefit scheme, I would guess that not many DB scheme members will actually appreciate the significance of the benefits they could lose if they transfer into a SIPP. So that's one, I think, potential dangerous area, all solvable and addressable by good advice. Then on the other side of that you've got the provider's position. Should a provider be taking, for example, execution-only transfer business from a DB scheme? Personally, no they shouldn't. Again, you can't reasonably expect the SIPP member to actually understand the ins and outs of transfers, SIPPs, DB schemes or whatever. So our position on that front is we won't take, other than the very limited exceptions, execution-only transfers. We require our potential SIPP members to go to their IFA, get the required information, and then move into the product if that's what the end result of the advice was. If the client's adviser can't provide that advice, we'll help arrange it for them.

JOHN: We're basically the same, we won't accept any execution-only business at all into pensions, including regular and single contributions.

STUART: Would you not take execution-only new business, excluding transfer?

JOHN: A personal pension that then can become a SIPP is a deferred SIPP and we won't accept any execution-only business on that at all.

STUART: There are people in the market who will take execution-only transfers.

IAN: On money purchase yes. I think it would be very difficult to find anybody doing execution-only DB, given the potential liabilities that we've had in the past.

CLAIRE: The other thing that made me a bit cross in the last few years is advisers who are just automatically shutting down SSASs and transferring benefits to SIPPs. We've had a number of our existing SSAS clients come to us and say 'Well I've been speaking to so and so and he says I should have a SIPP'. 'Well why? There's no difference really to what you want to do.'

STUART: I think it's akin to what happened 10, 15 years ago when you had the SSAS, deferred SSAS-type situations where life offices in particular were basically flogging EPPs under the heading deferred SSAS. Clients thought they been sold an EPP and yet in practical terms what they actually got was a deferred SSAS.

ELAINE: You're now getting this comment in the media about SIPPs being sold to wrong people, but two years ago they were telling everybody to have a SIPP. Who regulates that kind of coverage?

JULIE: I think it would be interesting to get some figures that say how many people actually think they've got a SIPP.

JOHN: I think the FSA clearly has been concerned. This thematic review that it's conducting on advice, the background to that is essentially around transfers and really internal transfers from a personal pension to SIPP. We've still got another three months or so until we find out whether there's anything in that or not, but we know it's being pretty thorough in its investigations. Given that the FSA has warned advisers twice on the issue, one assumes that there must be something behind these concerns, other than just what's in the press.

HELEN: Alright, if we just touch on the issue of group SIPP. I was just wondering, how do you see the group SIPP market developing? Do you think they should become a major aspect of occupational pension planning, bearing in mind, as you say, a SIPP in its pure sense shouldn't be a mass market product?

IAN: I think it's confusing the market again. We won a massive case recently, because somebody went in and suggested to all the employees they wanted a group SIPP, until we explained to the employer what that actually meant. I'm quite happy for the four directors to have it, absolutely right but what about those who want a SIPP for £150 a month?

CLAIRE: Is it just a GPP in disguise?

JULIE: That's a problem that we've got. We've got a massive corporate pension side. Over 90% of the assets invested for money purchase schemes, are invested in the default fund. These people, if you put group SIPPs in for them, they wouldn't have access to advice, they've got small funds. It goes back to the exact same concerns that we had over direct offer SIPPs. Why would you give these people access to a SIPP, unless it was very restricted and they had access to guidance and education?

JOHN: A month ago, Glaxo put in a group SIPP for their entire workforce.

JULIE: We get enquiries every single week from large companies about group SIPP. It's becoming a hygiene factor.

STUART: But would it not come down again to product design? You certainly wouldn't sell an all-singing-all-dancing SIPP to replace a corporate money purchase scheme. Providing it's structured so that you could have the one scheme, call it group SIPP, call it whatever you like, so that the directors have your top end proper SIPP functionality and those with maybe less financial nouse can choose the automatic and importantly cheap default fund while retaining the SIPP flexibility for future needs.

IAN: Who's giving the advice?

JULIE: You could see some companies where that would work and people would be sophisticated enough to be able to deal with that. Then you have the other workers that would feel out of their depth and could end up actually damaging their pension pots by playing about with the wrong things.

CLAIRE: There's limited use for a full SIPP, group SIPP. Where we're seeing interest is from the big companies with the share option schemes.

IAN: I did a presentation very recently to such a company about in-specie transfer. We actually got real interest. But do you know, nobody actually did the in specie in the end, all they did is start to fund their pension properly and work out what was the best place to keep those shares. So I think it's a great way in, I just go back to those people in the default fund - that's where I have an issue.

CLAIRE: I think people like Glaxo may be storing up problems for themselves if they're not making advice available to the members and you're getting these execution-only SIPPs.

HELEN: Okay, if we move back on to the issue of service standards. There has been a lot of comment about service standards, especially with regard to transfer times etc. Now, what issues do you think in particular SIPP providers need to focus on going forward to improve the standard of service that they're giving? How much will do you think there really is to improve performance in certain areas? If we can start on the adviser point of view, if you can tell me what kind of issues you would have dealing with SIPP providers.

CLAIRE: Depends which ones you deal with but some of the times we get quoted for in specie transfers are terrible. We've got two that have taken nine months so far, and it's shocking, because it reflects badly on us. I think a lot of the closed life offices struggle, but haven't got any incentive to help you. So I don't think it's endemic through the whole industry, I think it's just certain pockets of providers.

JULIE: We've actually put a transfer desk in place. I should stress that Suffolk Life do our SIPP transfers and we do the personal pension transfers. What we've done is we looked at the whole process from an adviser point of view and we said 'Okay well first of all we send you out this big long application form asking you lots and lots of specialist questions that you never ever answer, so we won't ask you that any more. We will go and ask those ourselves. We've taken on all of the chasing for the outstanding information for the funds etc. We've brought the average completion time for a transfer down from about 12 to 13 weeks to an average of four to five weeks. That just goes down fantastically with advisers. I should stress though that is a straight personal pension transfer.

ELAINE: Yes, it's not in specie ones.

JULIE: It's not in specie, which is when it becomes complicated.

ELAINE: We had one recently with a SSAS. We had re-registered everything and thought it was all done, and when we came to disinvest the money they suddenly started producing another whole load of forms, this hedge fund, as to what they wanted. The member's pension should have been paid in January but it didn't start until April. The company shall remain nameless but we eventually got them to recompense the client for the interest they had missed out on.

HELEN: If we move on to the final question of the day which regards the role of AMPS. How is the role of AMPS do you think developed or changed since SIPP regulation and how should it look to help its members more going forward?

ELAINE: How much influence do we think AMPS really has? It's a difficult one. There are certain things that HMRC has definitely listened to us on, and I think through simplification we certainly got a lot of good feedback and did a lot of interaction with the people behind simplification. The bit which I think we're trying to improve on is making sure that the organisations and government do come to us. Also we need to talk the other bodies within the industry such as the ABI. If there's a need where we've all got the same issues we can be consistent in our approach because if more than one body says the same thing to government, then maybe they'll start listening to us all.

IAN: I think the key thing is working with others. I think this is where as an industry we could actually gain. We all have our own agendas but to get HMRC to understand what we're trying to achieve is a big priority.

CLAIRE: I think the knowledge-sharing as well. It's good to know there's someone there you can talk to who understands the language you speak and the practical issues you face, as well as the bigger issues like lobbying government on key issues.

STUART: One of the things I've found most useful about AMPS is the access to technical information. If you're working away in your own office analysing whatever piece of legislation you care to mention, you build up your own thoughts and views. It's always very useful to go along to AMPS and speak to the folk there just to make sure you've got the right idea. It's a useful sounding board.

JOHN: I'd echo that. I think technically those organisations have served their members extremely well. I just think if the SIPP market goes the way some of us think it will and then AMPS needs to think about its position in relation to the ABI and the investment managers association. There is a risk that, because of the lobbying weight of some of those organisations, that AMPS is almost on the periphery.

IAN: I think also, it's very easy to get doom and gloom about things but the reality is very different. We've got really good SIPPs that are serving the clients well. We need to get that message out as well. It's about the right advice at the right time with the right product. I think that's the key.

IFA PROFILES

Claire Court is head of self administered pensions for Origen

Claire has worked in the pensions industry for over 20 years in a range of roles including administration, advising clients, and product development/management.

She currently splits her time between the management of Origen's full SSAS and SIPP products and advising her self administered pension clients on matters such as investments and retirement strategy.

Ian Price is divisional director - pensions at St. James's Place

Ian has spent just over 30 years working in the pensions industry. He joined St. James's Place in September 2004 as head of pensions, he is now a divisional director. His role involves all aspects of pensions marketing including corporate pensions, and he presents widely throughout the UK. Ian maintains an understanding of all aspects of the legislative changes affecting pensions in order to ensure that clients of St. James's Place are fully aware of current rules and guidelines. Since 2004 St James's pension production has risen from £56m APE to £172m APE.

PROVIDER PROFILES

Stuart Russell is head of SSAS and SIPP for Hazell Carr and is a director of Hazell Carr Pension Services Limited.

Prior to joining Hazell Carr in 2003 Stuart spent 25 years with Scottish Equitable - 19 of them in technical SSAS roles. During this time he managed the Scottish Equitable SSAS business line, with responsibility for three Regional Pensioner Trustee centres and programmed various bespoke applications including a maximum funding programme and automated actuarial report production.

With Hazel Carr, Stuart has continued his technical development, leading "Simplification" for the SSAS and SIPP business, managing several due diligence exercises for company purchases, and overseeing the design, development and delivery of the new Hazell Carr SIPP.

About Hazell Carr

Hazell Carr was founded in 1997 and administers over 10,000 pension arrangements for over 200,000 members. Services include actuarial resourcing, DB/DC pension scheme administration, complaint management, interim resourcing and SSAS/SIPP administration.

Running 4,000 self administered pension arrangements with assets of £1.1 billion, it has just launched a market leading fully flexible SIPP product into the IFA market. This has been awarded a Five Star Rating by Defaqto, a reflection of the product's strength of features, charging, and service. It has and continues to invest heavily in transforming its SIPP operations.

- Further information see www.hazellcar.com.

John Moret is director of sales and marketing for Suffolk Life.

John is often referred to as Mr SIPP having spent much of his working life since 1990 promoting the advantages of SIPP. He was the inaugural chairman of the SIPP Providers Group, now known as AMPS and has worked closely with Government and regulators on a range of issues.

He has spent a large part of his career working in the intermediary market on behalf of a number of pension providers. In 2004 he joined Suffolk Life.

About Suffolk Life

Suffolk Life is one of the UK's leading providers and administrators of self-invested personal pensions (SIPPs), having established over 10,000 SIPPs with gross assets of around £3 billion.

The innovative, Suffolk Life Master SIPP offers genuine self-investment of protected rights and exceptional investment flexibility for non-protected rights as part of the same scheme. With the protected rights market estimated at up to £100 billion, Suffolk Life sees this as the next big opportunity for SIPPs.

Elaine Turtle is director at Hornbuckle Mitchell.

Elaine has been in the pensions industry for more than 20 years in senior SSAS and SIPP roles. Her pensions experience includes working for Hymans Robertson, Rathbones and Wolanski and Co Trustees. Elaine joined Hornbuckle Mitchell in June 2003 to set up the London office dealing with third party administration.

About Hornbuckle Mitchell

Hornbuckle Mitchell has specialised in self invested pensions for 25 years. It has one simple rule: if HMRC allow it, so does Hornbuckle Mitchell. This unsurpassed flexibility has delivered market leading growth rates in the last few years and strengthened its position as the SIPP & SSAS specialist.

Following a strong history of innovation, Hornbuckle Mitchell has recently launched its unique income drawdown product, FIPP (Flexible Income Pension Plan). FIPP offers a broad range of options including income drawdown, ASP, annuity purchase and, for the first time, scheme pension.

Julie Mulvanny is head of business development - individual pensions at Prudential.

Julie has worked in pensions for the past 14 years, of which 11 have been at Prudential. Her position is head of business development for individual pensions means she heads up pension sales in the UK.

About Prudential

Established in 1848, today Prudential plc is a leading international financial services company with more than 20 million customers, policyholiders and unit holders.

Prudential has a range of products to help clients provide for their retirement. From pensions to annuities, releasing value from clients' homes, boosting income and taking advantage of tax breaks, Prudential has a wide range of products to meet client needs. For further information visit www.pruadviser.co.uk.

Helen Morrissey
Editor - Retirement Planner
Incisive Media