Sipp providers must address their quality of their service, according to new research by Sipp provider Liberty SIPP.

In a poll of 112 IFAs this month, just over half (51%) said they felt the reputation of Sipp providers had worsened in the past 12 months.

Only a quarter of IFAs surveyed said the reputation of Sipp providers had improved; while the rest felt the industry's reputation had stayed the same.

When asked about the level of due diligence that they carry out on Sipp providers compared to 12 months ago, nearly two thirds (62%) said they were now much more thorough.

Despite the apparent damage to the perception of Sipps, the research suggests that IFAs remain positive about using specialist pensions. Nearly two thirds (63%) of those polled said they were still likely to do business with Sipp providers. However 37% said they were unlikely to encourage greater numbers of clients to invest in Sipps.

John Fox, managing director of Liberty SIPP, said: "The results of our survey make some uncomfortable reading – and should serve as a wake up call to the Sipp industry.

"In the past year the sector has been through a de facto RDR, which though not as obvious or intrusive as that endured by IFAs, has concentrated minds and forced many to get their house in order."

According to the survey, the most important qualities that IFAs want to see in their Sipp providers were high levels of service (62%) and financial strength (25%). When asked if they felt Sipp providers should be more transparent about their fee structures, every IFA who responded said yes.
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Mr Fox added: "We've long advocated greater fee transparency.
The days of Sipp providers retaining interest earned on client cash and operating opaque fee structures are thankfully numbered.

"Within 18 months I hope that the Sipp industry will learn the lessons of the thematic review, adjust to whatever capital adequacy regime we end up with; and be able to offer the IFA community the truly transparent, responsive and flexible range of services that it both wants and deserves."

Liberty SIPP surveyed 112 IFAs by email in September. Liberty SIPP was established in the autumn of 2007 by Ian Currie and John Fox, who had previously worked within the Sipp and pension arenas.