Perhaps more importantly, the second question looks into whether clients are able to pick their own solicitors or property manager – which can be a huge element when investing in one of the most popular standard assets in a Sipp, commercial property. Property is a difficult enough asset to purchase, and knowing a reliable solicitor could be key to completing on a property within the FCA’s 30-day requirement. But seven providers said they insist on their own choices. Additionally, Attivo said in its Full Sipp, it only insists on its own choice of solicitor for property purchasing. Sippchoice said similar, for clients to use its solicitor and block insurance, but its property manager is not insisted upon.
James Hay, Liberty Sipp, LV=, Redswan, Rowanmoor, Royal London and Standard Life all insist upon clients using their internal choices and are not able to allocate an external third party.
Due diligence
Another area advisers need to be aware of is how each firm undertakes their due diligence process. Each Sipp provider has a different policy and way of going about checking they are partnering with the right advisers and DFMs.
LV=, for example, says it has terms of business agreements in place with all introducer firms and will only accept business from them once it has completed both financial and permissions checks. As well as this, the group makes sure the introducer does not appear on any fraud prevention lists and it does not allow execution-only business. When it comes to discretionary fund managers (DFMs), LV= only conducts business with FCA authorised firms and it does regular checks on permissions and disciplinary actions.
Dentons says it also checks the FCA register for inclusion and permissions when it comes to introducer firms. Execution-only clients are different, and cases below £50,000 are not accepted. If a client is investing in non-standard assets, they are also required to satisfy Dentons’ high net worth or “sophisticated” investor criteria and any direct clients are always recommended to take independent advice.
AJ Bell’s Investcentre differs from many Sipp operators, as it has a document in place called “adviser handshake”. The document sets out the terms on which adviser registration is based, then the business development and customer service teams operate a formal due diligence process that includes checking permissions. It covers aspects from verification of identity and charging to communication and data protection. DFMs are slightly different, and in order for one to become an “investment partner”, they must complete an application to be considered for a panel and all checks must be agreed in advance of any new partnership being agreed.
