Blog: What makes a SIPP?

I was catching up with the latest posts on the social network and noticed that our hosts in the alpine resort of Le Chinaillon had cleared the decks and the freezers and oiled the woodwork ready for the summer, only to wake next morning to several centimetres of snow.

Just as I read this, my partner phoned to say she had arrived safely in Normandy, and it was a sweltering 28˚C, a reminder that France is a big country, and full of contrasts.  This struck a chord.

Having been asked by the Association of Member-directed Pensions Schemes (AMPS) to address its Annual Conference, I was co-opted onto an impromptu panel of judges to assess the outputs from the workshop exercise, which was to come up with a suitable definition in answer to the question “What is a SIPP?“

You would think that such a simple question could yield only a limited variety of answers, but this was far from the case.  Definitions flowed, reflecting the SIPP offerings tabled by the diverse number of attending operators.

The publication of the FSA paper CP 11/3 on Product Disclosure definitely had its part to play in shaping the panoply of definitions forthcoming. 

This document was regrettably free from the influence of much of the good work AMPS and the ABI had done in exploring a menu-based approach to charging disclosure, far more relevant to treating the customer fairly than any vanilla-flavoured, assumptions-laden illustration, with its arbitrary growth rates and one size fits all anodyne box-ticking placebo of a remedy.

Our regulator seems preoccupied with the notion that it is the intention of a certain type of SIPP provider to obfuscate their charges through manipulating the construct of the offering, but isn’t RDR supposed to be putting an end to that?

What was clear to all, and the FSA may have woken up to this with their recent SIPP Operators Survey (SOS), was that, as the investments that define the self-invested nature of the expression of diversity of choice are almost always outside the regulator’s definition of what is “designated”, then perhaps it is time to look at a variety of definitions for the SIPP depending upon its investment mandate. 

After all, if you want Reblochon you don’t erroneously buy Camembert; unless they are both just labelled “cheese”.

Mark Lisle, compliance manager at Rowanmoor Pensions