Sipp operator Suffolk Life has has acquired the self-invested personal pension business book from Yorkshire-based wealth management business Pearson Jones Plc for an undisclosed figure.
The acquisition will see Suffolk Life accept the transfer of around 280 Sipp plans from Pearson Jones, following the latter’s decision to wind-up its two schemes: the Skipton (Pearson Jones) Sipp and the Net Sipp.
Pearson Jones will maintain its central role as financial adviser to the investors.
Suffolk Life, part of the Legal & General Group, is making the acquisition from its own retained profits, but said it remains “strongly capitalised” ahead of expected changes to capital requirements for Sipp providers due to be finalised before the end of 2013.
The plans will see the minimum capital requirement for firms quadrupled to £20,000 and the FSA is likely to demand that more capital be held against higher-risk investments.
The purchase follows on from the company’s acquisition of The PY Sipp from Pointon York in November 2012.
David Hobbs, managing director of Suffolk Life, said: “The acquisition of the Sipp book from Pearson Jones underlines our commitment to grow our business both organically and through the right acquisitions.
“The Pearson Jones clients and approach fits well into the bespoke end of our proposition and should add around 280 additional Sipps.”
Greg Kingston, head of marketing for Suffolk Life, added that as Sipp consolidation picks up providers are going to have to take care that the business they take on is digestible without detriment to the new or their existing customers.
He said: “A smaller firm trying to absorb relatively large Sipp books into their business is likely to make advisers think twice before recommending them, as they’ll have a vested interest in prioritising the business they have just paid for over their day to day work.”
Peter Heckingbottom, deputy managing director at Pearson Jones Plc, Leeds, highlighted that its core role as financial advisers represents 95 per cent of its turnover.
He said: “Sipp administration is a specialist ancillary function and, as a small administration operator, the new regulatory burden would mean that we would need to charge clients far more than the market rate if we were to continue and so we have decided to exit.
“Pearson Jones and Suffolk Life have worked hard to ensure that none of its clients is disadvantaged by the business transfer and that they will continue to benefit from top-class wealth management advice. Also, clients will be able to view their portfolios online, a feature which has been requested but which we have been unable to deliver.”
