Unless I get there first usually I hear about it through the headlines of “SIPP complaints rise” or “SIPP complaints jump again” or even sometimes about the reduction in the number of complaints. The big issue with this data is that it usually isn’t about the SIPP itself. It is about the advice given about taking out a SIPP or even the underlying investments of the SIPP. FOS provides the following examples of the complaints they deal with on personal pensions:
• the pension arrangement recommended was unsuitable for the consumer's circumstances;
• the investment funds chosen were inappropriate given the consumer's attitude to investment risk;
• the consumer was ineligible to start the pension arrangement;
• the consumer should not have been advised to contract out of the State Earnings Related Pension Scheme (SERPS) through a personal pension;
• there have been delays in starting income or annuity payments, or payments have been made on the wrong basis;
• the consumer was inappropriately advised to start an income-drawdown arrangement rather than purchase an annuity.
In the majority of the above examples, the issue is the advice and not the provider. You may say that this is splitting hairs but for someone who has worked with SIPP professionals for many years it still makes me cringe that there is little or no distinction here.
I understand that for those in the know it shouldn’t matter but with the bad publicity that SIPPs are receiving in the current market it is just one more thing that reputable providers are having to deal with.
I have made my position clear before, but I will reiterate it again, SIPPs are not for everyone and SIPP providers rely on financial advisers to decide if the client is not only right for a SIPP but right for their SIPP product. Not all SIPPs are equal, and no two clients are identical.
This also goes for the investments within the SIPP, providers do have responsibility to the advisers that choose them and the clients that invest with them to ensure the investments are suitable for a pension. However, it is difficult if not impossible for them to ascertain for certain if they are suitable for the client themselves, that is the responsibility for the adviser.
I still hope that complaints about SIPPs start to reduce, whatever they are about and we can get on with making sure clients have the best outcomes in retirement.
Claire Trott, Chair of the Association of Member-Directed Pension Schemes