Article by Mhairi
According to research from MoretoSipps, SIPP advice is very limited, with 70% of Self Invested Personal Pensions (SIPPs) in the UK operating without the benefit of a financial adviser.
Contrary to the widely held view, most SIPPs invest in mainstream products run through life companies and platforms. There are currently 6 million SIPPs in the UK holding around £700 billion in assets. That represents 20% of the UK pension market.
However, only 300,000 SIPPs are invested in non-mainstream products. Representing about £120 billion in investments. These types of investment still cause concerns for the Financial Conduct Authority (FCA) however, and there are strict controls in place to check the risk in these types of SIPP and that clients understand the risks. Most will benefit from SIPP advice from a professional adviser.
Financial understanding is an issue.
A recent survey by Quilter looking into people’s perceptions of their finances found that over 8 million people doubt their ability to understand their finances with any confidence. They found that:
- 19% of people thought that managing finances well was down to luck.
- 9% faked their understanding and
- 13% admitted needing help from friends and family.
- Although 40% of under 40’s thought of themselves as investors.
- But 23% said that they worried that they didn’t have enough saved to retire.
According to market leader St James Place 95% of people using an advisor say that they help them manage their finances with 85% saying that they have exceeded their financial goals.
Finding a financial advisor is also difficult.
Regardless of whether you are looking for retirement advice, investment advice or SIPP advice, finding an adviser is becoming more difficult. Part of that is as a direct result of new rules introduced by the Financial Conduct Authority (FCA) through the Consumer Duty. Aimed at protecting customers and making advice more transparent it has had unintended consequences. According to the FCA, advice firms stopped dealing with over 300,000 clients as a result of the new rules. Mainly because they felt that clients didn’t have enough invested to justify advice fees. So now, more than ever, the amount of money you have dictates whether you can get advice.
Even if you are happy to pay for it. The FCA thinks you shouldn’t pay if the fee is too high as a percentage of your assets. Of course, no one asked the clients if they were happy to have their services terminated. The average charge for ongoing advice is 0.85% amongst the biggest advice firms, with charges ranging from 0.75% to 1%. Our fees are slightly below the market average.
At the same time the number of Independent Financial Adviser (IFA) firms has fallen by 5% last year. Now there are just over 4,000 IFA firms left in the UK. We remain one of them. Rated by Vouched For as #12 in the UK last year based on the number of client reviews.
The number of investment advisers also fell by 1% as well. Now there are only 37,000 advisers in the UK.
However, the move to introduce targeted advice should help. It’s estimated that this will reach over 20 million people according to estimates by Royal London. This could end up being the solution to the advice problem.
Dynamic Planner found that over 50% of people who they surveyed said that they would use a targeted advice solution.
Get more information.
If you need SIPP advice then why not contact Christina today. She offers a free initial meeting to discuss your requirements and explain how our service works. You are under no obligation to use us after that if you don’t want to and we won’t pester you.
So why not call us today on 01282 614444 or e mail us enquiries@ccfps.co.uk or use our contact form online.
