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The financial services industry is preparing for the introduction of the Retail Distribution Review (RDR) on 1 January 2013, and although none of the changes are directly aimed at SIPP providers, there will be an indirect effect on adviser relationships and internal processes.
RDR aims to make the financial services industry more open and transparent, but it is thought that less than half of all SIPP providers are on schedule to facilitate key RDR requirements, such as adviser charging and statements of professional standing (SPS).
Here at Taylor Patterson, we have spent a great deal of time and care ensuring not only that our products meet the new RDR criteria, but also considering the affect it will have on advisers and service delivery to their clients.
For SIPP providers, the most important issues will be determining whether they allow for adviser charging from the SIPP fund, obtaining client confirmation that the charge has been agreed, and ensuring that any fees paid from the SIPP are consistent with the adviser’s fee tariff. It is important that key literature is updated, including websites; to communicate that adviser charging is being facilitated.
It will need to be clear how the charge is to be taken, from the SIPP bank account or is the investment provider to deduct and pay this from the investment.
Another change brought about by RDR means that all advisers will have to obtain a statement of professional standing (SPS) on an annual basis, provided they have gained the appropriate qualifications and completed their continued professional development (CPD) throughout the year. IFAs will need an SPS for each of their advisers.
SIPP providers will need to ensure that the advisers they are working with have an updated SPS as part of their usual due diligence processes. It is likely that literature such as the introducer agreement or adviser terms of business will need to be updated to reflect this new way of working.
Kerry Houghton, SIPP & SSAS business development manager at Taylor Patterson, says: “At Taylor Patterson we have been getting RDR ready since January this year, and we are committed to ensuring that our products and services meet the needs of both advisers and their clients alike.
“This means meeting all the necessary RDR criteria, as well as contributing to the efficiency of the service advisers’ offer to their clients by providing dedicated technical support, strong administration and a real understanding of their client’s personal circumstances.”
To find out more about RDR and how it impacts SIPP providers, please call Kerry Houghton on 01772 555073 or email email@example.com.