14 August 2012
SIPPS BECOME ‘SELF IGNORED PERSONAL PENSIONS'
Less than one in three (28%) say they have the expertise to manage properly
Only 37% are very confident they have the time to do it
Significant numbers of investors are failing to maximise the investment potential of their Self Invested Personal Pensions (SIPPs) because they do not have the time or expertise to self-manage properly, warns Investec Wealth & Investment (IW&I). For them, SIPPs have become Self ‘Ignored' Pension Plans.
Research commissioned by IW&I shows that half (50%) of SIPP holders manage their investments either themselves or get their partner to do so. However, when asked how confident they are about achieving maximum returns according to their risk profile, less than a third (30%) feel "very confident" that they have the expertise required.
When asked to think about their SIPP specifically in connection with recent volatile investment market conditions, only a third (37%) said they were "very confident" they had the necessary time and 28% the necessary expertise to ensure their SIPP delivered a strong risk-adjusted performance.
The study found that 15% of people managing their own SIPP said they were likely to appoint an investment professional to do so within the next 12 months.
Nick Gartland, Senior Financial Planning Director at the Leeds office of Investec Wealth & Investment, said: "Many people set up a SIPP thinking they will have the time and expertise to manage it properly but they realise that theory and reality can be very different. Managing a SIPP properly requires time, expertise and a strong understanding of market risk and appropriate asset allocation. Unfortunately, for many people this is simply too difficult. We'd advise anyone who is concerned about having a ‘Self-Ignored Personal Pension' to take professional advice."
The research from IW&I also found that, of those managing the SIPP themselves, under half 45% actually understand how their charging structures are calculated by their SIPPs provider. According to the study, the vast majority of those self-investing - some 70% - felt that SIPPs providers should simplify their charging structures.
Nick Gartland added: "This is a poor reflection of some SIPP providers and it's also a call to action for SIPP holders to better understand what they are paying for and whether or not their current plan represents good value and is the right product for them. Many Self ‘Ignored' Personal Pension holders will probably not fully understand the flexibility and power that a SIPP can provide. Not all SIPPs providers are the same, and only a few, including Investec Wealth & Investment, offer a dedicated, discretionary service with a fully transparent and straightforward fee structure."
IW&I's SIPP is a fully discretionary management service that means investors can formulate the right investment strategy with the assistance of a professional financial planner and experienced investment manager. Capable of holding a broad range of assets, IW&I's SIPP is available to people with £100,000 to invest.
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1Research conducted by Vision Critical among 1,300 people on behalf of Investec Wealth & Investment
Information on Investec Wealth & Investment ("IW&I")
IW&I offers wealth management and investment services to private individuals, charities, trusts, international clients and independent professional advisors. IW&I draws on the group-wide international capabilities and knowledge of its parent, international specialist bank and asset manager Investec plc. With a history stretching back to 1827, IW&I currently has over 600 staff located at its 11 offices throughout the UK. In December 2011, Investec plc acquired Williams de Broë, one of the UK's leading wealth management firms, as part of the acquisition of the Evolution Group plc.
At present IW&I looks after £12.8 billion of client assets*, excluding Williams de Broë.
Investec Wealth & Investment offers:
Discretionary and advisory investment management and fully comprehensive financial planning capability
UK and international multi-currency investment portfolios
Tax, pension, ISA, estate and succession planning
Onshore and offshore capabilities
In the UK, IW&I is authorised and regulated by the Financial Services Authority (FSA).
For more information on IW&I in the UK visitwww.investecwin.co.uk
*As at 31 March 2012
Media enquiries
Lisa Drury - Realm PR on 01757 242583 or e-mail:lisa@realmpr.co.uk