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 ChangesAccording 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!
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