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In the second instalment of our ‘In the Spotlight’ feature, Gillian Bardin and Kerry Houghton comment on why professional introducers and clients choose Taylor Patterson for their pension planning. They also explore the benefits of being able to offer flexibility and choice with our various pension arrangements.
At Taylor Patterson, you’ve got four SIPPs, Lanson, Master, Group and Cash what’s the thinking behind having four distinct products?
Kerry: Each SIPP fulfils a different need and is targeted at a different market. It makes sense to us therefore to separate them down, we don’t believe the ‘one size fits all’ approach is the right one to take. Lanson is our online offering for members who want access to a platform. The Group SIPP is used in the main for joint property purchase. The Master SIPP is the bespoke SIPP which allows access to a wide range of investments and the Cash SIPP is simply a slimmed down version, targeted at members who only want deposit accounts.
Gillian: When we first set up the SIPPs it was important for us to have clarity and a scale of charges for each separate product. At the end of the day it’s much clearer for members and they can switch from one SIPP to another. Phillip: It’s rare to see a Cash SIPP, I can only think of one or two others
Gillian: It was actually driven by the property SIPP. It takes time to transfer cash and then make the purchase and it acts as a home for money until this was done. It was unfair to have a client with the more expensive Master SIPP when they were only holding cash.
Kerry: There are plenty of other times too when holding Cash in a SIPP can be right and it’s unfair to charge for full investment flexibility when it isn’t being used. The fees for the Cash SIPP are therefore extremely competitive and we’ll accept any FSCS (Financial Services Compensation Scheme) protected bank and building society accounts.
As well as the four SIPPs you’ve also got a SSAS (Small Self-Administered Scheme)
Gillian: We do indeed, in fact we have three; the Full Service SSAS, Investment Only SSAS and One Member SSAS. Again we’ve tried to give clarity for members so they can see the charges they will pay; we believe it works better than having one product with a complex menu of charges.
What are the wider challenges that the self-invested pension world is facing?
Kerry: Accommodating flexibility moving forward and service, which people will value more than they have ever done, especially at retirement given the new rules from April 2015.
You mentioned service, which is clearly key to members, what else do you think is important to an investor or adviser when choosing a SIPP?
Gillian: Accessibility to real people who can help, which brings us back to service. Certain providers operate call centres and members can’t get access to the right individual. We work differently, for example if a query becomes very technical we are happy for the member or adviser to speak to our technical team direct, which is something a lot of our members and advisers really appreciate. This will be even more important after April next year. Flexibility is also important, and whether a provider is able and willing to offer access to all investments available through legislation.
How important is price?
Kerry: There’s a lot of pressure put on advisers to consider price when what the client wants is a high quality service. Unfortunately there’s been too much emphasis on price and not on service and flexibility.
Gillian: We’ve spoken to a few IFAs who have high net worth clients in very cheap SIPPs but experiencing very poor service, which causes a problem for the both the adviser and the client. You’ve also got to question how viable some of these very cheap SIPPs are in the long term.
When do you see investors and advisers using a SSAS rather than a SIPP?
Kerry: More frequently at the minute, especially when it comes to property purchase, the pooled funding option helps, although it can be a negative, especially if they fall out!
Gillian: We’ve also seen an increase in the number of people asking about SSAS loan backs. It’s probably driven by the economic conditions, with banks still not lending, or in some cases offering unacceptable terms. Many of the enquiries are driven by accountants and there are also some entrepreneurs who see SSAS lending as more palatable than borrowing from a bank. They are effectively paying interest to their own pension pot and can to some degree be more flexible on the terms they set. Many business owners have had a bad experience with a bank and just don’t want them having so much control over their business, especially in relation to debt covenants, personal guarantees and debentures.
What do you allow as security for lending from a SSAS?
Kerry: Obviously commercial property, there are occasions when we’ll accept residential property, although we are cautious. We can look at other types of assets too, the key, as always, is flexibility.
Why do you think advisers and members use Taylor Patterson?
Kerry & Gillian: Service!
Gillian: Personal service to be more accurate. It’s about long term relationships with both members and advisers; for example many of our SSASs have been with us since the 1980s and we are on the second or third generation. We listen to members and IFAs too, this is shown in the simple charging structures for our products, our recent recruitment of more staff and our latest offer on SIPP property transfers; all of these have resulted from listening to our clients.
Last question, if you each had to describe Taylor Patterson in three words, which would you choose?
Kerry: Professional, caring, fun.
Gillian: That’s true, after all our strapline is fair, fun and rewarding for all.