Sipp cancellation rules mean that investors could miss out on the first month of investment performa...
Sipp cancellation rules mean that investors could miss out on the first month of investment performance without waiving the right to a cancellation period, said industry observers last week.
The rules, which came into force last Friday, state that Sipp providers have to reimburse an investor with the full amount invested in a Sipp if an investor cancels the product within one month. Providers could therefore lose money if an investor cancels a Sipp that has fallen in value within the first month.
To avoid losing money, therefore, it is possible that providers will not invest the assets in a Sipp until the cancellation period has passed.
According to Shaun Sandiford, director at Sipp provider James Hay, investors can request that a Sipp provider invests their funds within the first month, but this would mean they waive their right to cancel the product.