James Hay blames ‘attrition’ as Sipp sales flat
IFG Group, the parent company of James Hay, announced today (18 May) that the total number of self invested personal pensions under administration was 37,956 at the end of April, slightly lower than the 38,289 administered at end December 2011.
In its interim statement IFG said that the UK business segment, 65 per cent of 2011 profits, is delivering a robust performance. It claimed that its two principal businesses, James Hay Partnership and IFA Saunderson House, have both recorded a “good start” to the year.
It said James Hay made 756 Sipp sales in the four months to the end of April, compared to 2,150 during 2011. It blamed attrition levels on the old James Hay book of business for currently outweighing sales, but the group said the levels were in line with its expectations.
IFG said: “Year to date attrition levels on both our legacy books are at or ahead of our plan. As disclosed previously, planned attrition levels are 10 per cent for the old James Hay book (7 per cent driven by the more seasoned demographic profile).”
However, IFG reported that Saunderson House is performing well.
As a pure fee-based advisor, Saunderson House generates revenue on a time-charge basis with targeted recovery rates of billable hours of greater than 80 per cent. IFG said this has been achieved through the first four months of the year and that the firm had secured 43 new clients.
It also said its agreement to dispose of the international division to AnaCap Financial Partners for £70m was underway. On 29 March, the group announced that it had signed an agreement for this sale, which is currently subject to the shareholders approval and regulatory consent.
IFG believes there is a “compelling” strategic logic for this transaction as it provides financial flexibility and a “clearly focused” advisory and administration business in the UK and Ireland.
In its statement IFG said: “The group is in a strong financial position. The receipt of the international sale proceeds will transform our business giving us significant optionality.
“As a group we are now considering further investment in our core business, substantially reducing gross debt and the opportunity of returning cash to shareholders.
“We will continue to invest in our core advisory and administration business. Our balance sheet strength, proven management team and recognised brands give us a unique opportunity to develop our business.”