It has not been all plain sailing, however.
Product of choice for scammers
Sipps have become the product of choice for scammers, who have targeted deferred members of defined benefit schemes to gain access to six-figure transfer values.
“Frenetic activity in this market came to a head last year when, in situations reminiscent of the ‘wild west’ days of miners being induced to transfer to personal pensions in the early 1990s, many British Steel Pension Scheme members were led down the same path,” says Mr Neale.
“The investments into which their funds were directed, together with the commissions and charges, are the reason why the Sipps that accepted the transfers are unlikely to match the benefits which were on offer from the steelworkers’ alternative choices.”
Mr Neale says some have levied criticism at Sipp providers who have been “overly willing to accommodate riskier investments,” while the providers in turn point the finger at the introducers, some of whom were unregulated by the Financial Conduct Authority.
“The old principle of ‘caveat emptor’ is still a subject of debate in the financial services industry,” he says.
But while the product – and those selling and managing them – still has issues to sort out, the Sipps story is largely a successful one.
The product has often been the first to offer new investment and drawdown options, and by its very nature is flexible to each user’s needs, says Ms Trott.
From a simple platform Sipp to the fully Bespoke Sipp, there is a product and provider for everyone.
“This is a relationship that is still developing with some ups and downs along the way, but in general it is a positive for the end consumer,” says Ms Trott.
“Sipps have changed significantly over the last 30 years and they will continue to change with the market to ensure they are at the forefront of an ever-developing pensions industry.”
