The pensions industry in the UK is the second largest in the world after the US, with assets totalling over £260bn in personal pensions. Introduced in the early 1990’s the Self Invested Personal Pension (SIPP) market has grown year on year so that there are now over 500,000 plans in force. On going annual growth is predicted at a conservative rate of around 20%.
New market entrants
With SIPP becoming the pension scheme of choice for most middle and higher income investors, new entrants have been plentiful to service this burgeoning market.
The choice of SIPP now ranges beyond specialist SIPP providers to insurance companies, banks, wealth managers, stock brokers and wrap platforms, that service the market either directly to the consumer or through an intermediary.
Keeping your clients or the risk of loosing them
75% of new business in the SIPP market is consolidation of investments and transferring from other providers. Simply put, if you don’t have a SIPP proposition you run the risk of loosing your clients when they get to retirement to another company that does have a SIPP.
The business challenge
SIPPs are now a mainstream pension product, however they are still perceived to be complex products which are difficult and expensive to administer.
This is made more so for new entrants to market who have a set of unique challenges of:
- Cost — how to administer comparatively small numbers at an acceptable cost
- Risk — how to de-risk a complex SIPP environment and service
- Knowledge — how to keep abreast of legislative and market changes
- Integrate—how to interface to existing IT systems
- Service—how to maintain client service and control
