When Richard Mattison formed Whitehall Group in December 2011, he was determined to initiate the comeback of small self-administered schemes after years of them being “overshadowed” by self-invested personal pensions. The director of the Bury-based firm said he wanted the firm to remain “small and specialist”, rather than become a household name, and to acquire “Ghostbusters” status – being the one to call when you need assistance.
So far, his attempt to go it alone has been successful: Whitehall Group was recognised as last year’s fastest growing Ssas provider. One of the ingredients of this success, he said, was the adoption of a new charging structure, which enabled Ssases to once again compete with Sipps.
Mr Mattison, who has been in the workplace pension business since the late 1980s, said the progress of Ssases was held back because they were marketed as complicated, which he claimed was a strategy used to justify their higher charges. Describing the situation as a “mess”, he added that Whitehall Group set out to streamline Ssases to “cut out the crap” and win back the hearts of sceptical IFAs, but it still had work to do to eliminate the many misconceptions about the sector.
He said: “The biggest misperceptions are that they are not regulated, which they are; that they are dodgy, which they are not; and that they are unsecure, which they are not.
“When Sipps started to take off in the mid-1990s, they were all set up by Ssas companies. Because their Sipp businesses started to go well, they dropped the Ssas business, so it just got left behind. If Ssases cost more and you make more from your Sipp book, then it is natural.”
Some of the misunderstandings surrounding the sector were not helped by A-Day’s removal of the requirement to have a professional trustee, which Mr Mattison said is the biggest challenge facing Ssases. Rather than reinvigorating the sector, he claimed that the rules encourage dodgy schemes to flourish and further reinforces the opinion that Ssases are unregulated and risky.
He added: “The professional trustee issue has led to the ability to use them [Ssases] for money laundering and pension liberation and to operate them on a DIY basis, which has created a huge mess. The challenge is how it will be cleared up. The whole sector has been clouded by the pension liberation stuff.”
However, if everything goes to plan, stability could be brought by the introduction of the “fit and proper person” rules, which came into effect on 1 September. In the same month, HM Revenue & Customs was granted the power to send information notices to scheme administrations in order to help them decide their suitability.
Mr Mattison said he hopes the new rules will not “bog down the industry” with unnecessary bureaucracy. He believes the rules represent “the perfect opportunity to clean things up”, resolve issues like speeding up pension transfers and “dispel the myth” that Ssases are not regulated properly.
Although regulation is often perceived negatively in financial markets, the rise in Sipp and Ssas complaints stemming from risky investments has fortified the view that it may be necessary to salvage reputations. The Financial Ombudsman Service’s annual report shows that the number of Sipp and Ssas complaints jumped from 697 in the year to March 2013 to 1,039 in the following year.
Mr Mattison blamed the steep increase on one-man band DIY Ssases, which he hopes will soon be “weeded out” by the fit and proper rules. Most other firms, he said, carried out due diligence to ascertain the suitability of investments, yet the whole sector is being punished for the rogue behaviour of a few.
He added: “The Ucis sector has basically been shut down. I am not sure that is what should have happened. The Treasury wants the country to be entrepreneurial and to invest in new ideas and businesses; that is what drives the economy. The Ucis issue is an example of how a lot of this has gone by the wayside because of how it was regulated.”
According to Mr Mattison, most Ucis failed because of the global recession they were almost blamed for causing, which was not helped by their name – unregulated collective investment schemes. Mr Mattison said there should be two tiers, one for retail investors and another for sophisticated investors, with the latter being regulated by “some general oversight” and called “sophisticated investment schemes”.
Despite identifying sevearl issues holding Ssases back from the recognition he feels they deserve, Mr Mattison was generally confident that Ssases are on track to live up to their potential.
Alongside the Whitehall Group’s successful strategy to rid its products of uncompetitive charges and confusing marketing, he believes that the growth of IFAs serving corporate clients will translate into a resurgence of activity.
Since bank lending to SMEs has dried up, Mr Mattison claimed a growing number of entrepreneurs are on the lookout for alternative ways to fund growth. He added: “One of the effects of the RDR is that IFAs are becoming more involved in business planning, for which Ssases are a perfect vehicle. IFAs now use Ssases more for their corporate advice clients, as they are the best-equipped pension vehicle for investing in your own business.”
Daniel Liberto is a former features writer at Financial Adviser
Richard Mattison’s career ladder
2011-present: Director, Whitehall Group (UK)
2010-2011: Business development director, James Hay Partnership
2008-2010: Business development director, IPS Partnership
2006-2008: Business development director, The PAL Partnership
2002-2006: Business development manager, The PAL Partnership
1996-2002: Account executive, The PAL Partnership
1993-1996: Account administrator, The PAL Partnership
1990-1993: Administrator, James Hay
1988-1990: Management trainee, Friends Provident
