Since the implementation of removing the need of an independent professional trustee to manage a small self-administered scheme (SSAS) in April 2006, many pension pots have unfortunately been poorly managed, exposing savers to unnecessary costs and risks.
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Many SSASs that have been purely managed by its members or trustees have run into trouble recently with scheme errors resulting in fines, loss of tax relief and in some cases closure by the HM Revenue & Customs (HMRC).
In comparison to its counterpart, the self-investment personal pension scheme (SIPP), SSASs have tended to gain an unfortunate amount of negative press.
However, this occupational pension scheme can be an ideal vehicle for executives, directors and owner managers who seek greater flexibility and control. Investments in a SSAS are free of capital gain tax and contributions also receive income tax relief.
Although by law, SSASs are not permitted to have an independent professional trustee, the option is still available.
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By GlobalDataAlex Brown, consultant, said: "SSASs are complex pension vehicles, and as such need to be carefully managed. We are of the opinion that the cost savings of our proactive advisory approach, coupled with protecting clients from a 55% tax charge on the poor understanding of the rules will far outweigh the costs of a pensionee trustee.
"Equally, the rise in third party administrators, who avoid the regulatory responsibility yet claim to offer clients protection from the rules need to be avoided".
Using a third party administrator such as Mattioli Woods will incur a fee, but investing in an independent professional trustee will provide client peace of mind.
Each client of Mattioli Woods is appointed a dedicated account manager to manage all aspects of scheme administration, in addition to a dedicated consultant. For owner-managers, a wealth management strategy needs to factor in business planning, as a SSAS can be used to interact with a clients’ business with great effect.
At Mattioli Woods, the consultants can advise on issues such as business cash flow, minimising tax, profitability, balance sheet strength, and succession planning, which can have enormous impact on wealth management.
