AI is gradually creeping into all parts of our lives. Nowadays, when we search for a subject on the internet, we are immediately presented with the combined wisdom of all the information available worldwide. It will write articles for us, suggest products we might be interested in (and many we are not) and help us save money on almost every product and service we might ever buy.
Algorithms are now so advanced that there’s no escape, and however much we might resist, the march of technology is undeniable. So, how do we equip ourselves to make the most of AI, and are there any benefits associated with non-resident SIPPs?
First, at the expense of stating the painfully obvious, it’s important to note that not all information obtainable on the web can be trusted. The same rules apply when considering buying investments, transferring pensions and opening online cryptoaccounts. Be cautious and ensure the company you are dealing with is legitimate and will work in your best interests.
AI makes it very easy for rogue operators to create marketing materials that promote what appear to be impressive investment opportunities, which turn out to be just another internet scam. In fact, I’d go so far as to say it’s never a good idea to buy investments based on random websites that can claim anything they like, while never intending to deliver. A deeper dive is recommended, and I would say it’s always a good idea to seek independent advice from someone who knows how to cut through the glossy marketing material and get to the bottom of what a proposed investment really entails.
This is not to say that all investment offers found on the internet are missleading or unsuitable, but it’s best to check.
UK pension plans vary considerably from the very traditional to the ultra modern. Older plans issued by insurance companies tend to be inflexible and proscriptive regarding how benefits can be taken. The introduction of Flexible Access Drawdown has improved options considerably and effectively enables holders to take as much as required on a year-by-year basis.
Modern-day pension plans offer 24/7 online access, allowing holdings to be viewed in real-time, making retirement planning easier and more accurate.
If I had a pound for every time I hear the words ‘I have a pension, but I’m not sure who it’s with’, I’d be a wealthy man! It’s unfortunate, but many people still lack a comprehensive understanding of their pension plans, particularly those with older policies. To some extent, this is understandable as ‘consolidators’ buy and sell pension companies without necessarily making it clear to policyholders.
If you aren’t sure about who now administers your pension, contact a specialist to help investigate what you have, what it’s worth, and the T&Cs applicable to your policy.
Remarkably, some pension providers still lack online systems, and policyholders are only given the option to obtain valuations by telephone. We’ve all been stuck on thel ine waiting for the next available operator, only to find out we are 27th in the queue. It doesn’t have to be like that with non-resident SIPPs.
Most non-resident SIPPs offer online access to pension accounts, so the telephone call from hell can be completely avoided. AI has taken this to the next level. The more innovative non-resident SIPP providers use AI to fully automate systems, which makes placing fund purchases and sales considerably quicker and easier. Similarly, all policy administration can be performed automatically, saving time and, most importantly, money.
With minimal human involvement, cost savings are passed on to clients in the form of lower dealing fees, withdrawal fees, and beneficiary nomination, as well as setting up a regular income stream. Portfolios can be rebalanced quarterly without requiring data input, and a wider range of investment funds and securities can be accessed quickly and securely.
Plan-holders never need to be concerned about investing in unregulated or toxic funds, as they are screened out, and the system won’t allow investors and advisers to make what might turn out to be regrettable decisions. Regulations concerning allowable investments held in pension plans have tightened considerably over the last few years; however, there are still companies that will accept dealing instructions for esoteric and unsuitable funds for retail investors.
The list below isn’t exhaustive, but it should help you assess what you are paying for and which services are included.
- Onboarding fee: this is an intitial fee charged by some SIPP providers.
- Annual fee: this charge is made annually and can vary significantly from one provider to another. This may be a percentage, a flat fee, or both.
- Investment platform fee: do you know what you are paying and to whom?
- Dealing fees: the cost of placing or switching investment funds. Again, charges can vary from very high to very low.
- Accessing pension benefits.: this includes the payment of lump sums, as well as the purchase of income and annuity products.
- Nomination of beneficiaries: who is going to inherit your pension plan?
- Payments on death or divorce.
- Transferring out fee.
Fund charges are often expressed as Annual Management Charges. Make sure you are quoted the Overall Charges Figure. It’s much more accurate.
Investment platform fees can be confusing. If they are too complex, be sceptical.
Adviser feesc an be multilayered. Ensure you are provided with all relevant information, including any incentives an adviser may receive for recommending one particular fund over another.
Whether you have an existing non-resident SIPP, an old UK pension, or a newer version, it’s worth comparing current fees with what might be available with an AI-driven alternative.
AI will take and give. Changing your pension provider could represent a big win. Be careful, though, and always ask an adviser to provide details of all fees.
For further information on non-resident SIPPs, please download our free SIPPs Guide
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