The headlines always read that SIPP complaints are up or down and imply that it is the SIPPs fault one way or another, but we need to look deeper than the headlines to get a true picture of what is going on.
In the latest round of Financial Ombudsman complaints data, we see that complaints listed under SIPPs are actually down in Q2 of the current financial year to 498 from 521 in Q1, although actual enquires about SIPPs are up from 678 to 767. So there is more contact about SIPPs, but less actual new cases progressing. In addition the amount of complaints upheld is down slightly to 49% from 50%.
What this doesn’t tell you is who the complaints are aimed at, although the annual report provided by FOS does give some insight into this. It makes it very clear that it isn’t actually the SIPPs themselves that are the issue in many cases, they are just the tax efficient vehicle where the funds are or have ended up at the point of the complaint.
In the annual report, we can see more detail of the complaints because it is spilt down by sector as well as product. Looking at all pension providers the top complaints were about personal pensions, SIPPs don’t even make the top five, but IFA-related top complaints were about SIPPs with personal pensions coming in fourth.
I don’t think that this means that IFAs are bad at dealing with SIPPs, but there is more chance of a complain occurring. When you think about the whole advice process, it could be about a whole host of things, such as contributions to the SIPP, taking benefits, the investments in the SIPP, transfer to or from the SIPP to name just a few, many of which will not be black and white decisions.
Pension providers on the other hand have clear procedures on what is and isn’t possible in most cases and so it is more likely that complaints will be about services or mistakes made.
All in all, I feel that unless you look at all the complaints in detail to ascertain what is and isn’t actually about the SIPP, the numbers are meaningless. We know that SIPPs are suitable for some but not all pension investors and that there is a blurry line between personal pensions and SIPPs that is getting ever more blurry by the day.
Claire Trott is Head of Pensions Strategy at Technical Connection