Introduction
Sipps have become an established part of the pensions arena, and considered by many as a pretty mainstream product.
They started out as a sophisticated tool for the wealthy investor, to build his or her own more tailored pension product, into which they could put a variety of assets.
Now they are offered to people from all sorts of walks of life with a whole range of needs and assets. Some are quite simple, and offer a limited range of funds; others are more complicated.
They have recently been in the headlines for leading unsophisticated people with pension funds, transferred out of DB schemes and elsewhere into complicated assets.
Many of these assets have been deemed to be far too risky for the client who invested in them, and some have them have fai;ed, giving Sipps, and some financial advisers a bad bame.
The rest of the industry has found itself being forced to pick up the tab, much to their chagrin, and the Financial Services Compensation Scheme has made it clear that it is unregulated introducers causing the problems.
The Financial Conduct Authority has also tried to restrict the type of asset that many of the Sipp administrators allow.
Nonetheless, for the majority they remain a useful wrapper to build up one's pension.
Contributors to this guide: Eddy Woore, team director of Mattioli Woods; Stephen McPhillips, technical sales director at Dentons Pension Management; Jamie Smith, managing director of Portafina; Ian Neale, director of Aries Insight; Claire Trott, chair of the Association of Member Directed Pension Schemes; Jessica List, pension technical manager, Curtis Banks; Anthony Carty, group financial planning and business development director, Clifton Asset Management; Adam Wing, financial adviser at UHY Hacker Young.
