Non-Standard Investments (also known as Specialist Investments) have not been permitted in James Hay products applied for since 9 January 2017.

From 9 May 2017, we will no longer allow new Non-Standard Investments, to be purchased within our products opened prior to January 2017. Top ups into NSIs already held will continue to be permitted, subject to the investment meeting our requirements.

 

The following Questions and Answers will give you further background to why we are making these changes and how they could impact you.

Q&A Sections

The changes being made and why

What is changing?

Non-Standard Investments (also known as Specialist Investments) have not been permitted in James Hay products applied for since 9 January 2017.

In addition, from 9 May 2017, we will no longer allow new Non-Standard Investments (NSIs), also known as Specialist Investments to be purchased within products opened since that date. Top ups into NSIs already held will continue to be permitted, subject to the investment meeting our requirements in place at the time the additional investment is requested (please see below for further details).

What is classed as an NSI for the purpose of this policy?

  • Intellectual property
  • Land banking
  • Overseas commercial property
  • Peer to peer lending
  • Unconnected loans (whether secured or unsecured)
  • Carbon credits
  • Storage pods
  • UK unquoted shares
  • Overseas unquoted shares
  • Unquoted loan notes and bonds
  • NMPIs, including:
  • UCIS such as Offshore unregulated funds and EPUTs
  • closed-ended investment companies not realisable within 30 days (e.g. no active secondary market)
  • Other SPV and pooled investment structures meeting the FCA definition of NMPI
  • Second Hand/Traded Endowment Policies
  • Fractional property investments, including property syndicates and other fractional ownership structures where ownership is held jointly across different SIPP products or with other third parties

Why is James Hay doing this?

We have undertaken a review of NSIs within our proposition. As a result of this review a decision has been taken to no longer accept new NSIs. The reasons for this change in policy are:

  • The demand for NSIs has reduced dramatically with many advisers no longer willing to offer advice on these investments;
  • NSIs now represent less than 1% of the total assets under administration held directly within our products and with this figure decreasing it is no longer a core offering within our proposition; and
  • The complexity and potentially significant risks associated with many NSIs can outweigh the potential rewards, in our view.

Overall, the combination of a lack of demand and the increased risk of many NSIs has led us to conclude that it is no longer appropriate to allow the purchase of new NSIs.

Will there be any exceptions made to the new policy?

No exceptions will be made to the new policy.

What will happen to NSIs I already hold?

  • Any NSIs you hold at the time the new policy change takes effect (on 9 May 2017) can still continue to be held within your product.
  • If you currently hold an NSI and wish to increase the investment into the same NSI then you can subject to a due diligence review and our existing requirements (see question below).
  • Any corporate actions relating to these NSIs will also be processed as per current procedures and NSI policy.
  • All corporate actions that require further cash to be invested into an NSI will be subject to due diligence processes and must adhere to the existing NSI policy

What are your requirements for ‘topping up’ an existing investment?

All NSI top ups are subject to a due diligence process. In addition:

  • You must have received appropriate advice in relation to the investment
  • The value of the NSIs you hold must not exceed 40% of the total value of investments held in your product
  • The investment must be acceptable to us.

Our requirements for accepting NSI investments may change in the future, the investment must meet the requirements in place at the time the increase is requested.

Which James Hay products are affected?

  • James Hay Modular iSIPP (in Modular iPlan)
  • James Hay Modular GIA
  • James Hay Modular iSIPP (pre Modular iPlan)
  • James Hay Partnership SIPP
  • James Hay Private Client SIPP
  • James Hay Select SIPP
  • IPS SIPP
  • IPS (2008) SIPP
  • IPS Family SIPP
  • IPS Pension Builder
  • WRAP SIPP
  • WRAP IP

Note: this includes all product variants of those products noted above

Who can I contact if I am not sure whether an investment I already hold or I am considering is an NSI or not?

If, after reading these questions and answers, you’d like to speak to someone about this or if you need to check whether you hold an NSI, please call us on 03333 206 182 or, if you are registered for online access send us a secure message through the James Hay Online secure web service.

Gold bullion is currently treated as an NSI in James Hay products - will this also be removed as an investment option?

No, gold bullion will no longer be treated as an NSI in James Hay products and will continue to be allowed for new investments (where available as a permitted investment on a product). There will be some changes to how we charge for holding gold bullion in our products (please see the charges section below). Please note until 9 May 2017 gold bullion will continue to be held under the Specialist Investments Module on Modular iPlan and Modular iSIPP. From 9 May 2017 it will be moved to the Whole of Market Module. You can review the charges here.

Why does this change not apply to SSAS?

At this time we are not making any formal changes to the permitted investments allowable within a SSAS arrangement; however this will be subject to ongoing review. SSAS has a different legal and governance construct to James Hay SIPPs which necessitates a different approach to decisions of this nature. Whereas a SIPP scheme is “owned” by James Hay (as provider and operator) the SSAS is set up by the employer for the benefit of its employees under individual scheme arrangements. In addition the use of NSIs that are seen within SIPPs is not of the same nature within SSAS, where loans and property are the dominant non standard investments.

James Hay will engage with individual SSAS scheme trustees should applications for NSIs be received to ensure all parties are satisfied that such investments are appropriate.

What about NSIs held by third parties?

Third parties include:

  • Investment managers (execution only and discretionary) used in James Hay products
  • Other platforms holding assets in James Hay products
  • RL 360 Offshore Bond available via James Hay WRAP
  • Other offshore bonds held in James Hay products
  • TIPs held in James Hay products

The policy for NSIs held by third parties is currently under review. No firm decisions have been made as yet with regard to the NSI policy and how it will apply to third parties. For now there is no change.

Why have I received multiple notification letters?

We issued a letter for each product that we have recorded where that product has the option to invest in NSIs. As such, if you hold more than one product which can currently invest in NSIs, you will have received one letter per product.

How this will impact you if you are already holding NSIs

Will investors holding NSIs be given the option to transfer out without paying transfer out charges if they are not happy about the change in policy?

Yes, If you hold an NSIs (including gold bullion and second hand/traded endowment policies) at the time the notification is issued (9 March 2017) you will be given 150 days to transfer out (60 days notice prior to the change and 90 days following the change) without paying our transfer out charges, including James Hay property transfer out charges.

Please refer to your product’s charges schedule for confirmation of the associated costs. However, you should be aware that there may be other third party costs associated with a property transfer, for example solicitor’s charges, that you could incur.

Why is James Hay giving 60 days notice and a further 90 days to arrange a purchase of a new NSI or to transfer out?

Whilst James Hay’s Terms and Conditions only specify that 30 days notice will be given for a change, it is recognised that this change is material and we wish to offer sufficient time for you to consider the impact. We believe that 60 days is sufficient to understand the impact, and to seek advice where appropriate. The additional 90 days recognises that arranging a new NSI investment or transfer out may take a reasonable amount of time.

What happens if I want to move from an older James Hay plan to a Modular iSIPP and it holds an NSI?

If you are moving to a Modular iSIPP from another James Hay plan that holds NSIs you can move the NSI(s) to the Modular iSIPP with the standard NSI charges being applied through the Specialist Investments Module. If you are moving from an IPS product the NSI must be able to be re-registered from dual trustee names to a sole trustee as per any investments moved from the IPS scheme to the James Hay scheme.

If I currently hold an NSI with James Hay, can I transfer in an NSI from another SIPP provider?

You can transfer in an NSI from another SIPP provider up until the date the policy changes on 9 May 2017 (subject to our due diligence process and our existing policy).

Once the new policy is in force, NSIs cannot be transferred from another SIPP to James Hay. This is because while you already hold the NSI, the transfer itself is deemed an advised event and a new NSI purchase from the perspective of the trustees.

How this impacts investors who currently have the option to purchase an NSI but do not hold one

Will investors who do not hold an NSI still have the option to buy one before the new policy comes into force in May 2017?

Yes, investors will still have the option to buy an NSI if NSIs are currently allowable in the product they hold (subject to a due diligence review and our existing policy)

The NSI application, however, must be with the Specialist Investment Team by the date the policy formally changes for existing investors on 9 May 2017.

If I don’t currently hold an NSI, can I transfer in an NSI from another SIPP provider?

Yes, up until the date the policy changes on 9May 2017 (subject to a due diligence review and our existing policy)

Once the new policy is in force, NSIs cannot be transferred from another SIPP to James Hay.

Will investors with the option to buy an NSI but not currently holding one be given the option to transfer out without paying transfer out charges?

No, as you are not materially affected you will be given 60 days notice but not the right to leave without paying transfer out charges.

The impact on charges

Will there be any changes to charges associated with NSIs?

  • The annual charges associated specifically with NSIs in Modular iPlan and Modular iSIPP e.g. the Specialist Investments Module charge, will continue to apply. This is because this change does not impact the ongoing obligations on James Hay to support existing NSIs.
  • A new annual charge where NSIs are held in IPS SIPP products and the James Hay Partnership SIPP will be introduced during 2017. This charge will be £300 p.a. (+VAT on IPS SIPPs).
  • This charge is being introduced to bring it in line with the increase in charges made to products on WinSIPP in 2015 where NSIs are held. This reflects the on-going costs of holding these assets in particular because of the on-going monitoring required.
  • From 9 May 2017, gold bullion will be moved to the Whole of Market (WoM) module in Modular iPlan and Modular iSIPP and will then be subject to WoM annual and trading charges. Where modules do not apply to a product but gold bullion is allowable, any gold bullion will be subject to the same annual and trading charges as 1-1 investments.
  • From 9 May SHEPs will be moved from the WoM to the Specialist Investment Module and therefore subject to the Specialist Investments Module annual and trading charges.
  • Trading costs for selling all NSIs will reduce to £100 per sale.
  • Additional investments into existing NSIs will be subject to the same NSI trading charges as currently apply.

Who can I contact if I am not sure whether an investment I am considering is an NSI or not?

NSIs come in many different forms and it may not always be obvious to you if James Hay will class an investment as an NSI. If you are considering an investment which you think may be an NSI or you are just not sure you can either contact:

If you have any other questions regarding the change to our NSI policy please use the contact details below.

Why has the policy changed?

We have undertaken a review of our NSI policy, and as a result, a decision has been taken to no longer accept investment into NSIs via James Hay products. The reasons for this change in policy are:

  • The potential risks associated with many NSIs can outweigh the potential rewards, in our view
  • The demand for NSIs has reduced dramatically with many advisers no longer willing to offer advice on these investments
  • NSIs now represent less than 1% of the assets held directly within our SIPP products, and with this figure decreasing, it is no longer a core offering within our proposition.

Gold bullion is excluded from this change in policy. Is it still treated as an NSI?

Gold bullion is no longer treated as an NSI in our products and so continues to be allowed for new customers wishing to purchase gold via the Modular iPlan. The Specialist Investments Module can only be used by those wishing to invest in gold bullion.

There will, however, be some changes to how we administer and charge for holding gold bullion in our products with effect from May 2017. From this date, gold bullion will be held via the Whole of Market Module.

For details of the charges applicable to the investment modules, please refer to the relevant Modular iPlan Charges Schedules or the Modular iPlan Charges Summary which you can find here.

If I hold an NSI with another SIPP provider, can I transfer this to a new James Hay product?

No, it is not possible to transfer an NSI from another SIPP provider to a new James Hay product with effect from 9 January 2017.