James Hay reports surprise iSipp take-up despite ‘attrition’
Sipp provider says advisers are increasingly moving clients to simpler pensions as technology brings costs down.
James Hay Partnership’s simplified self-invested personal pension offering has seen a spike in interest in the last twelve months as advisers re-evaluate which products best suit their clients, despite reports from the company of a drop in revenue due to “attrition” in its Sipp business.
Earlier this year (31 August), James Hay’s parent company IFG predicted it would not break even with its Sipp business until later this year, when new business acquisition surpassed the attrition rate.
However, according to Chris Smeaton, head of product development for James Hay, the company’s simplified iSipp has experienced a 247 per cent year-on-year swell in business.
Mr Smeaton said: “It’s taken us by surprise and it’s something we think is commonplace across the market. We have had different versions of a simple Sipp for years.
“What we have seen is the attitude among IFAs change.”
He added that while customer needs have not changed dramatically over the past decade, technology has reduced the cost to the provider, meaning a product can be offered at a lower cost.”
Mr Smeaton said: “At the same time the Financial Services Authority is saying you have got to justify moving a customer from pension A to pension B.”
According to Mr Smeaton, moving a client from a more complicated, £700-per-year scheme to a simplified £180-per-year scheme is more easily justifiable.