60% of advisers caught out by SIPP charges

60% of advisers say their clients have been hit by surprise charges in the past year underlining the growing demand for transparency on costs from SIPP providers.

Momentum’s research found 79% of advisers would support moves by the FCA to ensure providers publish their charges in a consistent manner to enable cost comparisons.

42% say the Capital Adequacy rules introduced in September last year have increased charges for standard assets while 76% say they have pushed up charges for non-standard assets. Momentum research shows transfer business – and particularly defined benefit transfers – are driving SIPP business.

John McCreadie, Head of Sales (UK), Momentum Pensions, said: “The SIPPs market is growing strongly but the support of advisers is crucial to maintain momentum across the market.

“It is clear that advisers want total transparency over charges from providers so they can make meaningful comparisons and recommendations to clients and it is depressing that so many say they have been caught out by unexpected fees.

“Transfers into SIPPs are a major issue particularly given the defined benefit pension focus which is highlighting the need to be clear on charging as well as on investment advice. ”