Online, simple, or bespoke: 3 types of SIPP and their benefits to clients

This article is intended for financial services professionals only. None of the information contained in this article should be received as advice. Pensions are a complicated area of financial planning and IPM suggests that financial advice from a suitably regulated financial adviser is sought before an individual takes any action in respect of their pension savings.

We recently looked at the different ways the IPM SIPP can help advisers with their clients’ SIPP scenarios and how our approach to charges can benefit clients who require a bespoke SIPP.

We touched upon how, in today’s world, there are a variety of SIPP offerings available. This FTAdviser article quotes a report from 2024 saying that there are over 60 active SIPP providers in the market. In our experience, many providers offer a variety of different SIPP options.

Back when IPM set up in 1999, it was more common that a provider offered just one wide-ranging and flexible SIPP. As time has progressed, not only have there been major technological advances in the financial services sector, but the SIPP has also gone from a niche product to something more mainstream.

Different types of SIPPs are therefore designed to cater to the needs of specific types of clients.

Broadly, the different SIPP options can be split into three categories:

• Online SIPP
• Simple SIPP
• Bespoke SIPP

Read on to find out more about the pros and cons of each for your clients.

Online SIPP

As technology has developed and people’s lives become increasingly digital, the popularity of the online SIPP has increased.

Typically, clients can establish these SIPPs quickly online. They are offered by companies that may run ISA portfolios and other general investment accounts, such as insurance companies and investment houses.

The costs of these types of SIPP tend to be at the lower end of the scale. Some even claim to be free, although there are costs for holding and making investments on that SIPP’s platform.

This is the main issue with online SIPPs. They are usually restricted to one or a handful of investment platforms and/or discretionary fund managers. Online SIPPs will therefore typically attract clients with:

• A lower amount of pension savings, and so they may be more conscious about fees
• Investment requirements that can be met by that SIPP provider and their platform/DFM of choice, regardless of the value of the pension benefits.

Some of these SIPPs may also have restrictions as to how benefits can be paid.

With regards to customer service and support, this is typically provided online. While this may suit some clients, should there be any issues with the SIPP, clients can often find themselves dealing with a call centre as opposed to being able to build relationships with staff at the SIPP provider.

Simple SIPP

We use the term “simple SIPP” here to refer to a SIPP that is not a full, bespoke SIPP. These types of SIPPs are not only offered by insurance companies and investment houses, but you will also see the more traditional SIPP providers offering a watered-down version of their full SIPP.

This can involve restricting the number of investments clients can make within the SIPP or restricting the choice of investment houses to a pre-approved list. For example, some insurance companies offer simple SIPPs that only allow investments into their own funds.

These SIPPs are designed to satisfy the needs of those clients who may have larger pension pots, but whose investment requirements may be greater than those offered by an online SIPP.

The charges and terms of simple SIPPs can vary. For example, some will offer only one investment alongside the trustee bank account from a pre-approved list in exchange for a lower annual fee. However, there may be costs for transfers in and moving money to and from the bank account.

Other simple SIPPs may charge a higher annual fee but allow up to three accounts – for example, from a pre-approved panel of investment houses or bank accounts.

In addition, where a simple SIPP is offered by a traditional SIPP provider, clients are often able to benefit from more personalised service and support, which you would expect from SIPP providers of this type.

Bespoke SIPP

This is the traditional SIPP offering. It reflects how SIPPs look when they were first created more than 30 years ago, and it’s the type of SIPP we most closely identify with.

Bespoke SIPPs offer the full range (or majority) of flexibilities permitted under HMRC’s guidance with registered pension schemes. Note that some providers may decide to restrict these depending on their own experiences and administrative capabilities – unquoted shares being a good example.

Clients can use multiple investment houses, as often there is no approved list that a provider will require an investor to select from (although all investment houses should be assessed by a SIPP provider before proceeding). Most bespoke SIPPs will allow investment in commercial property.

When it comes to non-standard investments, each provider has their own approach.

Most bespoke SIPP providers will consider these and will have their own assessment process for doing so. For example, at IPM we will consider investments such as quarterly dealing hedge funds or bank accounts with terms that cannot be broken within 30 days. However, we will not permit more esoteric investments or those into unquoted shares.

The fees charged for bespoke SIPPs tend to be at the higher end of the scale. However, these can vary greatly, as you can see in our recent article comparing various SIPP charges.

Each of the SIPPs will have an annual administration fee. However, different providers may then charge different fees (or not at all) for:

• Establishing the SIPP
• Transfers in
• Making investments
• Moving money.

In exchange for the higher fees, not only can a client expect to have access to a greater range of flexibility, but there should also be a higher level of service offered.

IPM focuses on clients who need flexibility and great service

Many SIPP providers have gone down the route of offering more than one type of SIPP for their clients. However, IPM has resisted doing this.

We accept that a full SIPP offering will not be suitable for all clients and our flat annual administration fee may not be cost-effective for clients with smaller pension pots.

Some time ago, IPM decided to commit to the bespoke end of the SIPP market. This allows us to do what we offer best: supporting financial advisers with tailored solutions for their clients’ retirement planning.

This also supports our ethos that we do not necessarily want to be the biggest SIPP provider, but rather the best provider possible at the bespoke end of the market.

As we recently considered, we know the IPM SIPP can offer a solution to clients with a wide range of circumstances. We are also confident that our SIPP offers value for money for clients:

• With larger pension pots who are looking for a more tailored service
• Who require greater flexibility
• Who have investment requirements that may not be straightforward.

Finally, we are also pleased to offer one of the most cost-effective offerings in the market for commercial property purchase within a SIPP. This is coupled with an experienced team to provide personal service for each transaction we undertake. To learn more about the flexibility available in purchasing commercial property in SIPPs, check out this section of our website.

Get in touch

If you have any questions about our bespoke offering, just reach out. Email info@ipm-pensions.co.uk or call 01438 747151