This advert is directed at professional financial advisers only and should not be distributed to or relied upon by retail clients.

Tony Parker, Wealth Accumulation Development Manager at AXA Wealth believes that well-designed SIPP products, backed with high quality servicing and online functionality, can meet 2010’s pension challenges.

In a retirement planning market offering complexity and choice, the future of SIPPs looks very bright indeed. The key to success is to ensure that products are customer focused with the FSA’s Treating Customers Fairly ( TCF ) principles at the heart of their design, and are marketed as clearly as possible, both to advisers and their clients. At AXA Wealth, we have focussed on three distinct areas: investment flexibility, servicing and the requirements of the Retail Distribution Review (RDR), when building our SIPP – The One from Winterthur. There are reasons to be cheerful about them all, so let’s start with investment flexibility.

Our SIPP provides investment options that appeals to both savers and retirees, and that adapts to changing client needs over time. We offer a wide choice, including mutual funds, unit trusts, exchange traded funds, insured funds, OEICs, stocks and shares and commercial property. Our plans allow basic pension fund investments to be established initially, if appropriate to the customer, and enabling scope to use more complex assets later on, such as commercial property. It’s only when clients actually use the self-invested options that they pay for them. The One from Winterthur offers a range of asset trading options, including: fund supermarket; online buying and selling via Selftrade; and discretionary fund management.

We believe advisers like flexibility, particularly during a client’s transition into retirement. The One from Winterthur is adaptable from the accumulation stages right through to the retirement years. Phased and partial retirement are both available, complementing the traditional income withdrawal options. There is no need to set up a separate policy. Similarly, customers are not committed to either our specialist ‘in house’ insured funds or to full self-investment. To meet their specific needs, they can build a hybrid strategy, incorporating both.

We also believe advisers and their clients will judge a SIPP to be only as good as the service they receive. With the exception of the property portfolio, our SIPP is administered in-house and draws on AXA’s long experience of self-investment through both SSAS and SIPP and pension administration.

It’s remarkable how 24-hour online access for pension planning has developed over the past decade, from quoting to trading. For example, consider the pre-sale stage. For a fully insured plan or for the insured part of a self-invested plan, advisers can quote for single contributions, regular contributions, transfers and protected rights, combining any of these in the same illustration. Post-sale, advisers can carry out online trading, switch funds and rebalance portfolios. They can also create investment and disinvestment strategies and access a wealth of information at the click of a mouse.

It’s easy to be complacent when external initiatives like the Retail Distribution Review (RDR) are proposed for pensions and do not come in to full effect until the end of 2012. In the past, sweeping changes have come and gone, each with their own challenges and opportunities. But the RDR is a significant shake up of the industry impacting both providers and advisers, and it is a change we view as an exciting opportunity.

For AXA Wealth, RDR means not just ensuring our products fit the FSA’s requirements, but designing overall RDR options to meet the changing needs of advisers and their clients. Many of our products are already supported by RDR-ready customer-agreed remuneration structures, but we have also taken steps to help advisers adjust. The One from Winterthur gives advisers the choice of either a funded or unfunded remuneration structure. Allowing a funded option at this stage may seem at odds with RDR, but we think it will assist advisers through the transition period up to 2012 and beyond. This is because the switch to a fees basis can be achieved using the same plan, with no need for another change of products or providers.

There are many other good reasons to believe that SIPPs will remain at the forefront of pension planning, such as:

• Increased control for clients who choose a ‘self-invested’ option.
• Whilst selecting from just one provider’s range of funds may be appropriate for some customers, a wider choice through ‘open architecture’ is the way forward where the SIPP is the ‘tax wrapper’.
• Increased demand for drawdown means the need for investment choice and flexibility as become standard.
• Increased life expectancy drives the need for sophisticated investment strategies.
• SIPPs offer opportunities that many retirement products do not – buying commercial property or making in-specie transfers for example.

As long as SIPPs adapt to meet changing needs, their future looks assured. We remain positive and confident about their future in the retirement planning arena and look forward to continuing the AXA heritage in this area.

Please remember that the value of your client’s investment can go down as well as up and is not guaranteed. They could get back less than they originally invested.

There are no minimum or maximum contribution levels for The One from Winterthur.

The AXA Wealth proposition is offered by companies within the AXA UK group of companies. AXA Sun Life Services plc distributes financial products and services for these companies and is issuing this item on their behalf. Details of the companies offering specific products are contained within the related material. AXA Sun Life Services plc is authorised and regulated by the Financial Services Authority and is a company limited by shares, registered in England No.3424940, registered office: 5 Old Broad Street, London, EC2N 1AD. As part of our commitment to quality service, telephone calls may be recorded.