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SIPP It and See… Part One – How we used Progeny’s combined expertise to set up a SIPP for staff

By Jonathan Crew 16th November 2017 No Comments

X-rays, microwaves, the pacemaker, gunpowder, super glue, the discovery of penicillin…. What do all these things have in common? The answer is they were all invented or discovered when the scientists were striving for something else. They are the fortuitous outcomes of a commitment to making progress, and they have changed the world for the better. The scientists’ simple faith in breaking new ground brought rewards that they could never have imagined.

These examples sprang to mind recently when two fellow Progeny Law directors and myself set up a SIPP – a Self-Invested Personal Pension. SIPPs are a type of personal pension that gives investors the freedom to manage their own fund by dealing with and switching their investments when they want to.

Without the right advice, tackling a SIPP can be complex and time-consuming. But in our case, thanks to the way Progeny is structured, we had all the specific know-how immediately on hand to address our needs in-house. In this two-part blog post, we will be looking at how we have used our unique structure in setting up our SIPP and how clients can do the same. We’ll also look beyond this to show why it’s so beneficial to have this network of expertise in place and how it can help clients make the most of the investment opportunities available.

Without the right advice, tackling a SIPP can be complex and time-consuming. But in our case, thanks to the way Progeny is structured, we had all the specific know-how immediately on hand to address our needs in-house.

So, I can hear you wondering, how does me setting up a SIPP relate to the discovery of penicillin? Let me explain…

Setting it up

Two fellow directors and myself had private pensions that were performing satisfactorily but we were keen to explore other options. We put our heads together and struck on the idea of putting them together into a SIPP.

SIPPs have gained popularity in recent years as investors seek to diversify their options and take a hands-on approach to their pension plans. They allow you to select from a number of assets and invest in a range of vehicles including options like unit trusts, investment trusts, government securities, insurance company funds, commercial property and individual stocks and shares, amongst others.

As my “day job” at Progeny Law involves acting for clients on the acquisition and sale of investment properties we naturally had a good handle on the commercial property sector. We did however need help with the establishment of the SIPP itself. This is where we were able to call on the expertise of our colleagues at Progeny Wealth. If clients are interested in setting up a SIPP, this is the part of our business that would assist them.

Progeny Wealth researched the market for the most appropriate provider to suit our objectives and compiled and completed the necessary paperwork on our behalf. They then contacted the existing pension providers to initiate the transfer of the funds and saw the process through to a successful completion. Progeny Wealth’s expertise extends far beyond this, and they can give guidance on the further advantages to commercial property investment beyond the initial set up of the SIPP. We’ll address this in more detail in part two of this blog, next month.

Surveying the scene

Now that the SIPP is set up and in place, we are able to start looking for property to invest in. We have started speaking to our contacts in the industry. These are people who we work with every day and have a strong working relationship with – the surveyors who will find the property, the building surveyors who will ensure it’s structurally sound, and so on. We’ve briefed them on the sort of properties we are looking for and have been gathering information from them on what’s out there on the market.

SIPPs allow you to select from a number of assets and invest in a range of vehicles including options like unit trusts, investment trusts, government securities, insurance company funds, commercial property and individual stocks and shares, amongst others.

This is a professional network that we have cultivated and grown over the years that was ready and waiting for us to tap into. When we source what we feel is the right property for us to invest our funds in, myself and my colleagues at Progeny Law will be able to carry out all the due diligence on the legal matters ourselves.

Simple and seamless service

In sum, the process has been simple and straightforward from start to finish. As a professional who is a part of the Progeny family, you would expect me to sing the praises of how we work as a group but in this case, I’m also speaking as a client. I only know about one part of the process – investment in commercial property –  as it’s my everyday job. Most normal investors wouldn’t be expected to have this knowledge but because of the combined expertise we have at Progeny, there’s no reason why this should stop them in seeking, with our help, to do the same thing.

On paper, what could appear to be a daunting and time-consuming process for the uninitiated was made swift and seamless by having all relevant advisors together under one roof: Progeny Wealth for the SIPP set-up and Progeny Law for the commercial investment property expertise. We can assist any clients wishing to do the same but it’s also important to remember that we have capacity within the group to cater to whatever their individual requirements might be. For example, when you’re reviewing your pension arrangements it can also be a timely opportunity to take stock of your investment portfolio, or, thinking further ahead, of how you would like to pass on your estate to your heirs, which Progeny Asset Management and Progeny Private Law can help with respectively. Only the Progeny Group is uniquely able to provide this level and breadth of service to clients.

This is just one example of how Progeny’s set-up creates a new type of offering for clients. It’s also bigger and more important than this – and here’s where we come back to scientists we started with. It’s an example of something we didn’t know we could do until we came together like this as a business. Our multiservice approach brings unique opportunities and solutions for clients and a limitless capacity to meet their bespoke demands. Just like the inventors and discoverers of X-rays, microwaves and penicillin, having a faith in progress and breaking new ground will often be repaid in ways we could never have imagined.

In the second part of this article we will be considering investing in commercial property more closely.

  • What are the key challenges for investors concerning leases and tenants in commercial property?
  • What are the advantages of combining pension fund, like a SIPP, and property?
  • Why should owner-managed businesses consider buying through a pension and renting to themselves?

We will be looking at all of these questions and emphasising why it’s so important to have the help of an independent financial adviser, lawyer and surveyor working together to ensure clients can avoid the potential pitfalls and seize the opportunities of commercial property investment.

The content of this article is for information only and is not intended to be construed as legal advice and should not be treated as a substitute for specific advice. Progeny Law Limited accepts no responsibility for the content of any third-party website to which this article refers.

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