Changes to Wrap SIPP provider

We’re changing who provides the SIPP on Wrap

In 2021 it was announced as part of the strategic relationship between abrdn and Phoenix that the arrangement would be simplified and abrdn would become the provider of the SIPP on the Wrap platform. To facilitate this a new abrdn pension scheme will be set up for the abrdn SIPP which will be launched in due course.

As preparations are being made to implement the change of provider, the Wrap SIPP product offering has also been reviewed and some of the current features and investment types will not be available under the new abrdn SIPP.

What's happening and when

As part of the Adviser Experience Programme, the Standard Life Wrap SIPP (Wrap SIPP) will be replaced by the abrdn SIPP which will be provided by the abrdn group (abrdn SIPP). There are a few features currently being used by some of your clients that will not be available on the abrdn SIPP, so you and your clients will need to decide what action to take.

These changes do not affect any other Wrap products or any of your clients’ other investments on the Wrap platform.

Further down this page you can find details of the three options we made available to your clients, and copies of the letters they received from Standard Life in January 2023.

The deadline for making a decision and taking relevant action was 14 April 2023. If we didn't hear from you by this date, your clients' Wrap SIPP will be converted to a Standard Life Active Money SIPP (Active Money SIPP).
We are currently in the process of converting impacted Wrap SIPP accounts to Standard Life Active Money SIPP accounts. We will contact you over the coming months as and when we begin the conversion process for each of your impacted clients.

Important dates

January 2023 - client letters issued by Standard Life
14 April 2023 - deadline for taking any relevant actions
From 17 April 2023 - we will begin converting clients' Wrap SIPPs to the Active Money SIPP on a case-by-case basis and we'll be in touch when the conversion takes place

Which features are impacted

The following features are currently being used by one or more of your impacted clients and will not be available via the abrdn SIPP:

Investments in gold bullion
Investments in commercial property
Investments in Barclays Managed Portfolios
Pension Contribution Insurance
Capped drip feed drawdown

In addition to the above features, your clients can also be impacted by the following scenarios:

If they have more than one plan in the Standard Life Self Invested Personal Pension Scheme which allows them to take benefits before age 55 or a tax-free lump sum greater than 25% (Protected Benefits).
Investments which can’t be sold due to the provider experiencing financial or operational distress (Distressed Investments) and cannot be re-registered to another pension scheme. For clients holding Distressed Investments in their SIPP, the only available option was option two, noted below. Your clients' letter from Standard Life states if they hold Distressed Investments.

How this could affect your clients

Clients currently using these features will be unable to transfer their Wrap SIPP to the new abrdn SIPP. The options that were available for these clients were set out in the client letters and in this document. Unfortunately, it will not be possible to transfer a client's Wrap SIPP to the abrdn SIPP where the client holds Distressed Investments which cannot be transferred to another pension scheme.

To preserve client outcomes, impacted clients will be able to continue with their current selected pension features and investments by having their Wrap SIPP converted to an alternative product within the same Standard Life pension scheme – the Active Money SIPP.

Any other products and investments on the Wrap platform the clients may be invested in will be unaffected by this.

Options made available to your clients

Option one – Keep their SIPP on Wrap

With this option your clients will keep their pension on Wrap. Changes had to be made to their current Wrap SIPP, as outlined in their letter by 14 April 2023. Depending on the features they currently have in their Wrap SIPP, they needed to:

sell any investments in gold bullion and/or commercial property;
change any capped drip-feed drawdown to flexi-access drawdown or remove the drip-feed drawdown and replace with another drawdown method under capped; and
stop any Pension Contribution Insurance.

If they have any Protected Benefits, please see their letter for information on the options that were available.

Please note: Your clients could have more than one impacted pension feature which may affect their decision whether to convert to the Active Money SIPP or transfer to the new SIPP.

Option two – Convert to a Standard Life Active Money SIPP to keep existing features and continue to manage some pension assets on Wrap

If your clients want to retain their current features, their Wrap SIPP needs to convert to the Active Money SIPP. Their Wrap SIPP will be converted to the Standard Life Active Money SIPP from 17 April 2023.

The Active Money SIPP will be set up to hold the same investments and use the same pension features as the client was using within their Wrap SIPP, however you should be aware of the following:

abrdn Wrap Platform

The Active Money SIPP is not held on Wrap. Any investments traded off Wrap, for example commercial property (Off-platform Investments) will therefore not be viewable within their existing Wrap account.
Most investments traded on Wrap (for example mutual funds, securities, cash and Managed Portfolios (being model portfolios managed via the Investment Hub)) (On-platform Investments) will remain on Wrap. These will be moved into a separate Personal Portfolio held in the name of the Scheme Trustee, Standard Life Trustee Company Limited. The investments in this Personal Portfolio will belong to and be displayed as an asset within your client’s Active Money SIPP. This will allow you to maintain these On-platform investments via Wrap and their value will continue to count towards the client’s Wrap account platform charging bands. We have created this guide to provide further information for administering the Trust Personal Portfolio accounts.
As these investments will be moved to a new Personal Portfolio, they will be treated as a new investment for performance purposes and historic transactions will no longer show on Wrap.
The value of the Personal Portfolio will be updated on the Active Money SIPP weekly.

Plan number

While the plan will remain in the same pension scheme, the plan number for the Active Money SIPP will be different from the one that your client had for their Wrap SIPP. They will be given documents with this new plan number following the conversion of their product (by letter).

Annual pension statement

The date your clients’ annual pension statement is issued will change. The new date will be the anniversary of the date when the Active Money SIPP is set up. Your clients will be informed of the new date their annual statements will be issued (by letter) when the Active Money SIPP is opened.

Regular contributions

If your clients make regular payments into their Wrap SIPP by Direct Debit, unless they give instruction to stop, these will continue to be collected without interruption when the Active Money SIPP is set up. Their bank account provider will be notified that the collection reference will change to the new Active Money SIPP plan number.

Costs and charges

Your clients’ costs and charges for the Active Money SIPP will be calculated differently from how they were calculated on the Wrap SIPP. They will initially be set so that they will pay no more than before the conversion. However, please remember that charges are regularly reviewed and may change in the future. Standard Life will write to your clients in advance, explaining their options before making changes to the charging structure.
If there are remaining products within your clients’ Wrap account, a review will be carried out to ensure that their charges do not change as a result of the conversion. You will be informed if any changes are required to charges, following the review of any remaining products and linked family accounts.
Charges for On-platform Investments held in the separate Personal Portfolio will remain the same and the investments will continue to count towards your client’s Wrap account platform charging bands.
Clients will still benefit from any family linking to reduce overall platform charges.
As insured funds cannot be moved to the separate Personal Portfolio, your clients’ charges will be re-calculated to ensure their Wrap account is no worse off.
The conversion to the Active Money SIPP will be free of charge to your clients.
If there is insufficient cash available to pay for accrued Wrap SIPP charges at the point of transfer to the Active Money SIPP, we will disinvest in line with our terms and conditions for covering charges.

Income drawdown payments

If your clients are receiving regular income drawdown payments, these will continue to be paid from the Active Money SIPP in accordance with their current instructions.

Insured funds

If any of your clients hold insured funds in their Wrap SIPP, these will be sold and units bought in the equivalent funds under the Active Money SIPP. These products use two different fund series and the unit prices for the funds within them are not the same. This means that the value at the point of sale and purchase will be the same but the number of units that your clients hold will be different.

Online access

Access would need to be established separately for the Active Money SIPP. Clients can gain online access to the Active Money SIPP via www.standardlife.co.uk/pensions/personal-pension/sipp.

Your clients can continue to view their existing Wrap account and most of the On-platform Investments via the separate Personal Portfolio on the Wrap Client Portal, if they have online access set up. You will be able to grant access for the separate Personal Portfolio by adding this account to your client’s profile on the Wrap Client Portal.

Off-platform Investments

If your clients hold any Off-platform Investments these will be re-designated from the Wrap SIPP to the Active Money SIPP. This process does not disturb the investments. Standard Life will inform the Off-platform Investments provider of the change to plan number.

Adviser remuneration

If you are being paid ongoing adviser charges from your clients’ Wrap SIPP, these will be set up to continue on the Active Money SIPP. There may be changes to payment dates following the conversion.

If you are still being paid commission this will stop and you may wish to talk to your clients about setting up an alternative, such as ongoing adviser charges.

Managed Portfolios

Investments in Managed Portfolios will be moved from your client’s Wrap SIPP to the separate Personal Portfolio. There may therefore be a short time where the investments are held outside of the discretionary investment manager’s control whilst the movement takes place. We will ensure there is no client detriment encountered as part of this process.

Payment in/out

To make payments into or out of the Personal Portfolio, you can contact Standard Life on 0345 0845 000 to ensure the appropriate expectations are set up for the Active Money SIPP.

You will then be required to enter the corresponding expectation onto the Personal Portfolio account on Wrap.