Liberty SIPP

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SIPPS in 2009 - “a change is going to come”

2009 will be an interesting year for SIPPs.

The collapse of interest rates will mean increased clarity in fee structures as certain providers won’t be able to prop up their cheapish looking fees by relying on taking up to 1.5% of the interest rate earned on cash deposits.

Soon gone will be the days when SIPP providers restrict clients to cash being held in 1 default account because of the extra administrative burden this provides! Clients won’t quickly forget the panics of North Rock, HBOS etc and will demand that separate chunks of £50k be held in separate bank accounts in organisations with unique FRN numbers.

Customers will demand more from their SIPP providers – flexibility and diversification will be the watchwords! People will no longer be content to throw everything they have into equities, close their eyes and hope for the best.

They will become more choosy, wanting a greater say and understanding in where their funds are invested; investing in assets in which it is easy to comprehend how returns will be earned and dealing with IFAs who give them the opportunity to cast their nets over a wider investment pool. It is the end of the “suck it and see” investment age and the dawn of “scratch and sniff” caution before committing their funds.

2009 will be an interesting year but it will be one where we see for the first time the true capabilities and opportunities that pension simplification provides.

In the last recession the ability of SSAS’s to provide loanbacks to the sponsoring employer saved thousands of UK businesses.

In the current downturn the saviour of many SME’s could well be SIPPs and their ability to provide new sources of capital into a bank-shy world through buying unquoted shares to re-capitalise companies or provide start up funds for new ventures.

2009 will be the year of the SIPP!

Jan 26, 2009