Do you trust your SIPP illustration? Why?

Have you ever thought about it? I mean, who checks these things? And if no one has checked them, how do you know they’re right?
Ok, SIPP providers have to be authorised by the FSA – but that doesn’t mean the FSA have picked apart every provider’s illustrations and given them the ok. That’s not a criticism: it’s simply not realistic for them to do that. Think about it …
The SIPP market is a niche market and yet there are a huge number of companies operating in it – over a hundred providers, some of which have more than one product. SIPPs are also complex products, with many product and investment options and, consequently, generally quite complex charging structures, especially when you add in the charges for the investments themselves and, in some cases the charges for advice. It wouldn’t be easy for anyone to check all that out and maintain an eye on it!
Do you know what data goes into an illustration? And, just as importantly, do you know what data doesn’t go in? Who checks the basis of the calculations? Actually, that last point might sound innocuous but, mathematical prodigies aside, it’s probably rather more complicated than your child’s maths homework! In fact, so much so that I think I’ll pick that up another day …

About sipphound

Chewing over pensions, saving and retirement issues. Sniffing around financial planning, personal finance, investing and behavioural influences. All personal opinions, no company represented and no advice given.
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