IFG forecasts boom for Sipps
Sipps make up one of the most important individual retirement markets in the UK and are set to expand, according to the chief executive of a pension provider and adviser firm.
Mark Bourke, chief executive of IFG Group, speaking as the firm announced its preliminary annual results, said the company planned to increase its Sipp intake in the next five years.
He said changes in pension rules, the decline in defined benefits schemes and a trend of managing one's own retirement assets had promoted growth in the sector.
Mr Bourke added: "We have 40,000 Sipps under administration and believe the market will grow by 10 per cent to 25 per cent a year. We also believe the market will consolidate because small firms will not be able to bear the compliance and capital adequacy burden."
The annual results show IFG had revenues of £105.9m in 2010, compared to £82m in 2009, and reduced its net debt by 67 per cent to £13m.
The company's total assets under administration and advice totalled £61.5bn, which included £12.3bn from its acquisition of James Hay Partnership in March last year and £2.63bn from Saunderson House, its IFA arm.
Saunderson House recorded a turnover of £18m in 2010, compared to £5m in 2002.
Mr Bourke said: "Three-quarters of our business is as a pensions administrator and the other quarter is our fee-based IFA business in the city, which gives advice to professionals.
"Saunderson House has an unconflicted, transparent model. We have no commission bias. It is a model that works well with the majority of our clients
"The type of advice, and the form in which we give it, is being driven by the regulator and that resonates with the client and is good value."