Whilst this website is primarily about pension annuities, it also looks into other pension options and reports on market activity. Looking at self invested personal pensions (Sipps), it looks like a growing number of consolidations and casualties are likely during 2009 amongst smaller providers due to escalating competition and increasing regulation.
It is likely that the next 12 months will provide an extremely tough challenge for independent Sipp providers as the market’s landscape starts to evolve. It is fair to say that the dynamics of the market place are changing and only those firms with robust systems and controls and an awareness of the full scope and expectation of the changing regulation will survive.
The Financial Services Authority (FSA) produced a Product Sales Data Trends Report in September which showed that 37,000 Sipps were sold in the six months from the 1 October 2007 to the 31 March 2008. Interestingly, some 25,000 were sold by just the top five providers.
There are 100 providers reporting, meaning that the other 95 are scraping around for just 12,000 plans and on the basis that the distribution is obviously not even then the report poses some interesting questions about the future of many of the independent providers.
Sipp products have been shoe-horned into the regulation of a personal pension product and for the insurers this is something they can adapt to easily with systems and controls that have been in place for years now, but the same cannot be said of the smaller independent Sipp provider.
