There was an interesting report from CoreData Research issued recently that showed full self invested pension schemes (SIPPs) have risen to the top of the wish list for advisers on platforms.

The research makes for very interesting reading. But having been involved in the industry for more years than I care to admit, I am confused as to how a platform can truly offer a full SIPP. I agree that demand for SIPPs continues, but there is clear polarisation in the market with the more commoditised offerings via the platforms at one end and the bespoke full SIPPs at the other.



When SIPPs were first introduced back in 1989, by the then Chancellor Nigel Lawson in his Budget speech, it revolutionised the pensions market. SIPPs were the new kids on the block, flexible, in tune with how long term savings were evolving and they gained traction via advisers, lawyers and accountants. The reason for this is that they were perceived as an ideal retirement planning tool, in particular because of Memorandum 101, which provided the only investment guidance at that time for the investments permitted within a SIPP, and enabled commercial property to be held by an individual in their pension pot.

We have learnt a lot since 1989, the world is very different, people’s attitudes to spending and saving have changed, but one thing that remains is that long term investors still like investing in property, be it via REITs, funds, direct equity holdings in house builders etc. property is still much loved, though I tend to find most clients do prefer to invest direct i.e. purchase a commercial property.

But, investing in commercial property can’t be stream lined, it isn’t something that can be commoditised, it needs high levels of technical expertise and experience. Properties need to be well managed and there are many pitfalls that a SIPP investor can fall foul of if they don’t have the technical back up and that can lead to unexpected tax liabilities. Something that no-one wants.

To give an example, just sitting here I can think of a couple of potential issues, the first are the new MEES regulations which can have a huge impact on the rental of a property and can cause renovation costs that the saver may not have known about. The second is purchasing a property that has an element of residential property in it. In some cases, as we all know, this can be done but it has to be completed correctly to make sure the SIPP does not receive a large tax bill or create a leasehold so no residential is within the SIPP.

So property is a great investment for the right people but the only way I can really see you can hold it via a platform is through REITS or another collective investment fund.