Sipp attrition continues to weigh on James Hay profits

Self-invested personal pension provider James Hay Partnership has reported a drop in revenue and profits for the first half of 2012 due to continuing net “attrition” in business levels, despite the group reporting an increase in sales for the six-month period.

The firm saw its profit fall to £5.3m for the first half of the year, down from £5.9m for the first six months of 2011.

The company stated in its results: “We have not yet built new business to a level which exceeds historic attrition rates which in our business plan is scheduled for Q3 2012.”

James Hay had 37,632 Sipps under administration at the half-year mark and currently serves more than 45,000 individual clients.

The company expects to “break even” with its Sipp business this year, reaching a point where new business acquisition surpasses the attrition rate.

It added that the last four months of 2012 will be a period of heightened innovation in terms of product offering, intermediary support and direct-to-customer services.

James Hay revealed Sipp sales had fallen flat in results earlier this year (18 May).

The firm’s parent company IFG Group reported an overall adjusted operating profit of £5.9m, down £1.3m from £7.2m in the first half of the previous year, as revenue and profits at IFA business Sanderson House also fell.

Mark Bourke, chief executive officer of IFG Group, said: “The first half of 2012 marked the transformation of IFG Group from a diversified financial services business to a focussed pension administration and financial advisory provider.

“With stable income streams, an extremely strong balance sheet and prominent positions in our chosen markets, we continue to build the group.”