There has been unprecedented change in the pensions industry in recent years and SIPPs have been no exception. 

When first conceived, SIPPs were designed to enable the client to choose their own investments within a tax efficient wrapper.  Times have certainly moved on and a SIPP is no longer just for the wealthy or for those that wish to invest in commercial property. 

Reflecting on the rise of the platform concept and having assets in once place, there is now a growing use of single investment SIPPs by advisers and their clients, where the investments are held with one investment manager, stockbroker, platform/wrap or trustee investment plan to meet the client needs.

Single investment SIPPs are attractive as they meet a specific need without requiring access to full SIPP architecture. This means that the servicing becomes easier and more seamless but importantly for the client allows them access to a cheaper fee structure.

The single investment proposition continues to work well, as with full architecture SIPPs, to provide a vehicle for ongoing accumulation but it also retains flexibility in allowing clients, through their advisers, to move from one investment manager to another as their investment needs and priorities change.

We shouldn’t forget pension consolidation either, recognising that with changing working patterns, more people than ever are finding themselves with various pension pots scattered amongst multiple pension providers, I think the last statistic being an average or 8 or 9 pension pots.

A single investment SIPP is a good way to consolidate these pots, minimizing the charging and having everything in one place but with the flexibility to choose and focus on a single investment provider.

Despite the simplified nature of the single investment product, advisers shouldn’t be concerned that the full range of options is available, particularly at the point of choosing a retirement path. Unlike with some legacy insurance products, the single investment SIPP can be used, without establishing a new product, to provide access to both flexi-access drawdown or an UFPLS. In essence, the SIPP retains all of the flexible options a client and adviser should expect with today’s pension products.  

In summary, the move to more single investment SIPPs is an interesting one for the sector.  On the one hand, people argue that a single investment SIPP isn’t really a SIPP, just a personal pension and that a SIPP should be able to purchase commercial property. 

On the other hand, a single investment SIPP can be seen as an entry point to a SIPP, the start of a cradle to grave product, something meeting a specific investment need and one where the client only pays for what they use.