International SIPP, ‘Standard’ SIPP – What’s the difference?

Chris Perry, Operations Manager for PSG SIPP, took some time out of his very busy day to explain the difference between International and ‘Standard’ SIPP’s.

International SIPP –or – ‘standard’ SIPP, what’s the difference? Arguably, there are no differences and certainly we find the moniker ‘International’ can be unhelpful and misleading. From a regulatory perspective, there isn’t really any such thing as an International SIPP. It’s a term coined to identify those clients who perhaps now reside overseas but have access to a UK pension fund. Both ‘types’ of SIPP are UK registered pension schemes, both are FCA regulated, and both are subject to the same rules in regard to investment and drawdown options. In other words, to the consumer, they are the same, so why the distinction?

Some will tell you it’s a marketing ploy – slap the ‘international’ tag on it and raise your fees by 50%. The reality couldn’t be further from the truth, certainly not here at PSG SIPP. I can’t deny as a pension vehicle, the technical capabilities of an international SIPP aren’t much different than their UK resident counterparts, but lift the bonnet and there’s a few subtle, but crucial differences, for example;

Accessibility

Most UK SIPP Operators won’t even think about accepting a client resident outside of the UK into one of their SIPPs ; it’s way too far outside of their comfort zone. At PSG SIPP we will consider advised non-UK residents, whilst adhering to the strictest compliance and regulatory standards. Just because someone doesn’t live in the UK anymore, why should they lose access to a secure, UK regulated, well run pension scheme?

Administration

Looking after international clients is more onerous than those that still reside in the UK. Many other companies would be put off by the extra legwork involved as well as the different time zones, possible language and cultural barriers to overcome. Early morning call with an adviser based in the Middle East? We’ve done it. Jumping on a Zoom call late at night to talk through an issue with a client in Australia? We’ve done it. These aren’t problems for us here at PSG SIPP, but I can’t imagine any of our larger competitors doing the same.

Complexity

International SIPPs come with additional layers of complexity that aren’t part of the ‘domestic’ market and therefore aren’t normally tolerated by most UK pension providers. I’m talking about issues around currency flexibility, knowing your stuff on dual taxation agreements and FX payments. These are just a few of the technical extras exclusive to dealing with a UK regulated SIPP that counts overseas clients amongst its membership. Facilitating investments for those clients requires additional knowledge, expertise and experience as well as a slightly different mindset. It’s crucial that we deploy appropriate due diligence before we accept any new SIPP and the subsequent transfer and investment.

For reasons of unwanted additional complexity alone, most SIPP providers here in the UK wouldn’t even consider allowing an individual residing overseas into their SIPP. We have a great track record in helping advisers with complex, or just unusual scenarios. It’s something we pride ourselves on – the clues in the name, Pension Solutions Group.

I’ve expanded on a few key differences between ‘International’ and ‘Standard’ SIPPs but really, I need to reiterate the point that the concept of a ‘International’ SIPP is misleading. All SIPPs, by definition are UK products, regulated by the Financial Conduct Authority (FCA), and can only be provided by UK based firms who are also regulated by the FCA. The differences are largely administrative. Perhaps I would say this, but if you want to succeed in this sector, I can’t overstate how important it is to have the technical know-how paired with a real drive to provide support and service at a level most pension providers can’t offer.

The team here at PSG SIPP are largely trained ‘in house’ making them experts in the intricacies of dealing with our international clients and advisers. We also provide turnaround times that are pretty unheard of in our industry, for example, most work being actioned within three to five days but even beyond that, we’re genuinely always happy to help, in any way we can.

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