Outrageous SIPP Charge Increase

Outrageous SIPP Charge Increase
Sharm El Sheikh Egypt by Julian Cohen. Why?

SIPP clients often suffer a wide range of charges, but this newly introduced SIPP charge is simply disgraceful

Incredible: Some SIPP Clients Are Being Billed A SIPP Charge For The New Pension Reforms

Are You Going To Have To Pay This SIPP Charge?

Pension freedoms introduced in April 2015 have been tremendous news for so many of us. 

It might make sense for some people to suffer income tax on withdrawals to enable them to kill off high cost debt.  But many SIPP holders have taken advantage of the new rules to increase their SIPP contributions to maximise tax relief and shelter their funds from future death taxes.

So it comes as a bit of a shock to learn how one SIPP operator is treating its customers.

A Scandalous SIPP Charge For Rule Changes

SIPP charge
According to an article in Financial Adviser magazine, it’s reported that sizeable SIPP and SSAS operator Mattioli Woods has written to its clients to inform them they are going to have to pay as the scheme rules have had to be updated.

One of its SSAS clients received a letter informing him he is required to pay £495 plus VAT for the privilege of ensuring his scheme is up to date. 

When the client’s adviser contacted Mattioli Woods, its operations director Mark Smith did his best to justify the decision.  He further confirmed its SIPP clients would each be charged £195 plus VAT for changes to the SIPP scheme rules.

On 27 January 2015, Mattioli Woods published an article on its website boasting that growth was continuing with a 23.4 per cent increase in revenues.  It reported having more than 6,000 clients.

It doesn’t take a consulting actuary to work out that charging SIPP and SSAS clients hundreds of pounds a pop for rule changes could pocket the firm an incredible sum of money.  And rather a lot more than even the most expensive of lawyers may dare to charge to ensure the scheme rules are rightly and properly reflective of the latest pension freedoms.

Virtually every business these days has some form of terms of business.  That includes the wonderful clauses you agree to when you use PayPal, which contain more words than Shakespeare’s Hamlet, but which are singularly much less interesting.

Happily, we can’t find any other instance of a business charging its customers for such an update, either within financial services or outside of it.

This SIPP Charge Is Bad News

Following what appears to be a never-ending stream of scandals and mis-selling, this sort of behaviour does no favours whatsoever to the financial services industry. 

What’s more, imposing such a SIPP charge begs the question how such a staggering approach is in line with the Financial Conduct Authority’s requirement that all regulated firms are required to ‘treat customers fairly’. 

According to the SIPP charge article in Financial Adviser, the Financial Conduct Authority declined to comment on this issue. 

Perhaps it was simply as dumb-founded as the rest of us!

Please Share This

If you’ve found this page of interest, please would you kindly send a link to it to your friends and colleagues using the buttons below.  You’ll be helping us out, and they might appreciate it too.  Thanks, it's much appreciated.

 

AJ Bell Is Often The Best Value SIPP For Stockmarket Assets

That's our opinion.  Not just because AJ Bell was the first company to offer an online SIPP.  Nor that it's received many prestigious awards.  And not even because the wife of SIPPclub's Founder has an AJ Bell SIPP.  It's because it's one of the most competitive stockmarket SIPPs on the market. 

Over time, charges can wipe out a huge part of your fund.  We like AJ Bell because there are no set-up costs.  If you hold passive funds, which is our preference, or shares, investment trusts, EFTs, gilts or bonds, you pay one small fixed fee no matter how large your fund.  And when you come to draw your benefits either as occasional drawdown or UFPLS payments, there's a small charge for the whole year no matter how many times you access your money (many SIPP and SSAS providers charge more than this for each payment).  However, you should always compare charges in detail, because AJ Bell could be more expensive than other providers, depending on the type of stockmarket assets you hold.

Visit AJ Bell

Get Valuable SIPP And SSAS Insights Emailed Directly To Your Inbox Every Monday

  • Please use an email address you can access. You can unsubscribe at any time.
IMPORTANT NOTE: NOTHING FEATURED ON SIPPclub IS EITHER AN IMPLIED OR A SPECIFIC RECOMMENDATION TO MAKE, OR TO REFRAIN FROM MAKING A FINANCIAL DECISION.  THIS PAGE HAS NOT BEEN APPROVED AS A FINANCIAL PROMOTION.

As SIPPclub neither advises on, nor arranges, nor recommends specific investments or strategies, we're unable to say whether a SIPP or SSAS or any investment within it is right for you. Ultimately, it’s your money and your decision, and you should only proceed once you're satisfied you've undertaken sufficient due diligence. If you need advice, you should speak to your trusted adviser, or you could find a local adviser from Unbiased.co.uk.  Alternatively, we'd be pleased to introduce to a suitably qualified independent financial adviser.

Please read our full Terms which includes criteria for SIPPclub membership.