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SIPP market: guest article by Charles Dewey from Curtis Banks

Author Image Charles Dewey Head of Key Accounts and Third Party Relationships, Curtis Banks
4 minutes read
Last updated on 9th July 2020

The views and opinions expressed in this article are those of the author and do not necessarily reflect our views.

Given the disruption of the past few months, it’s understandable that many clients are thinking carefully about their financial situations and re-evaluating their key objectives. Clients may be considering issues such as:

  • Whether they are still on the right track to retirement
  • Whether their various tax wrappers are performing as expected or required
  • Whether their investments are bouncing back from the big drop earlier in the year
  • How long they have left to retirement, and whether there’s time to recover from the losses
  • If it might be possible to reduce overall costs and still take advantage of an upturn in the market.

Who are Curtis Banks?

Curtis Banks specialises in providing self-invested personal pension (SIPP) and small self-administered scheme (SSAS) solutions to clients via their financial advisers. We act as the professional trustee and pension administrator, providing service and support to financial advisers and their clients. We do not provide investments or have our own range of funds, and we are not tied to any particular investment provider. Instead we work with any investment provider of the adviser or client’s choice, and we undertake due diligence on those chosen to ensure that they’re suitable for investing pension monies. We also have an extensive list of ‘investment partners’: firms who provide us with automatic electronic data feeds, allowing us to offer a fee-saving option for clients. We listen to our advisers about their chosen investment solutions and work to add their chosen investment providers to our investment partners list wherever possible.

Why SIPPs?

SIPPs are known for being flexible retirement products which can offer access to a much wider range of investment options than many other types of pension. For example, SIPPs might offer access to:

  • Discretionary managed portfolios through a discretionary fund manager
  • Model portfolio services through a discretionary manager or on a platform
  • Trustee investment plans
  • Execution-only stockbroker trading accounts
  • Commercial property
  • Fixed term bank accounts
  • National Savings & Investments accounts.

Many people open SIPPs in order to consolidate their various pension arrangements into a single product which offers access to an investment solution better suited to their needs. Often, clients only make use of one of the types of investment solutions on offer but can change as their needs change.

We recently presented to financial advisers alongside Prudential and Quilter on the topic of ‘reviewing the review’, highlighting the importance of going back and checking previous plans in light of disruptions such as the current pandemic. As mentioned above, clients are likely to be particularly concerned about whether they are making the most of their investments and products.

Multiple Investment Solutions

It’s becoming more common for individual SIPPs to hold multiple investment solutions; such as a combination of a bespoke DFM portfolio alongside a Prudential Trustee Investment Plan and a cash holding. This allows the client to hold different risk profile investments within the same pension. For example, the DFM portfolio might be higher risk, looking to try to take advantage of cheaper equities in the market; the Prudential TIP might be lower risk to smooth the bumps in the road and provide steady returns; the cash holding could then provide a low return over a timescale to fit with the other assets.

Holding a range of investment solutions within a SIPP also enables clients and their advisers to manage where income is taken from in drawdown. The client and adviser can decide what to disinvest based on the returns, the risk profile, and the timescale for the investment, so that the client can take income from their gains and protect their capital. The diagram below shows the structure of a SIPP holding multiple assets and providing income to a client using the Curtis Banks

Your Future SIPP:

Another key feature clients and advisers may look for in a SIPP is the ability to quickly and easily change the client’s income payments. Good communication between the adviser and the SIPP provider is important to make sure the SIPP can adapt quickly to the client’s changing needs and requirements.

At Curtis Banks we have seen a big uplift in advisers using the Prudential Trustee Investment Plan alongside various other investments. Smoothing returns against a volatile market helps give clients some comfort while seeking gains elsewhere.

Charles Dewey, Head of Key Accounts and Third Party Relationships, Curtis Banks

Curtis Banks Limited is authorised and regulated with the Financial Conduct Authority.

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