IFAs say SIPP providers 'urgently need to address quality of service'

In a poll of IFAs, just over half of respondents (51%) said they felt the reputation of SIPP providers has worsened in the past 12 months.

Only a quarter of IFAs surveyed said the reputation of SIPP providers had improved; while the rest felt the industry’s reputation had stayed the same.

When asked about the level of due diligence that they carry out on SIPP providers compared to 12 months ago, nearly two thirds (62%) said they were now much more thorough.

Despite the apparent damage to the perception of SIPPs, the research hints that IFAs are far from falling out of love with the specialist pensions.

Nearly two thirds (63%) of those polled said they are still likely to push more business towards SIPP providers. However 37% said they are unlikely to encourage greater numbers of clients to invest in SIPPs.

John Fox, Managing Director of Liberty SIPP, commented:

“The results of our survey make some uncomfortable reading – and should serve as a wake up call to the SIPP industry.

“In the past year it has been through a de facto RDR, which though not as obvious or intrusive as that endured by IFAs, has concentrated minds and forced many to get their house in order.”

What do IFAs look for in their SIPP provider? According to the survey, the most important qualities that IFAs want to see are high levels of service (62%) and financial strength (25%).

When asked if they felt SIPP providers should be more transparent about their fee structure, every IFA who responded said yes.

John Fox added:

“At Liberty we’ve long advocated greater fee transparency, and it’s good to know that an overwhelming majority of IFAs agree with us.

“The days of SIPP providers retaining interest earned on client cash and operating opaque fee structures are thankfully numbered.

“Within 18 months I hope that the SIPP industry will learn the lessons of the thematic review, adjust to whatever capital adequacy regime we end up with; and be able to offer the IFA community the truly transparent, responsive and flexible range of services that it both wants and deserves.”