Two thirds of self invested personal pensions are made on a non-advised basis with this number expected to increase, according to a recent report.
The report from consultancy firm MoretoSIPP explained growth in the Sipp market had been driven by investment platforms, and found platforms now administer Sipp assets of almost £200bn.
Founder of MoretoSIPP, John Moret, said the past five years have seen “enormous growth” in the world of self-invested personal pensions and believed it could grow to £750bn.
He said: “Much of the growth has been driven by investment platforms which now administer Sipp assets worth almost £200bn. Life companies also remain major players.
“The specialist providers willing to accept non-standard investments have reduced in number although total complex Sipp assets still exceed £100bn.”
His report estimated there were around 60 active Sipp providers of which fewer than 40 offer complex products, which allow savers to hold a wider range of investments.
Moret’s report added the number of investors who do not seek advice on their Sipp currently stands at two thirds, a figure which is expected to rise.
He said there is a new breed of “fintech” Sipp providers, some of whom have started to make a real breakthrough - particularly in the non-advised space.
It also found less than 15 per cent had vested their benefits, which Moret suggested could provide the opportunity for advisers to develop new services for the decumulation market.
“The growth in non-advised Sipp numbers and the staggering finding that less than 15 per cent of Sipp investors have vested their benefits suggests there is a huge technology driven opportunity for providers, existing and new, in developing services focussed on the decumulation market particularly for non-advised investors," Moret said.
“There is no doubt the Sipp market has changed dramatically in the last 10 years partly in response to regulatory pressures.
“Those pressures continue with consumer duty and its likely impact.
“For example, the recent FCA concerns over the retention of interest margins and cash account charges is likely to lead to impaired revenues for many Sipp providers and potentially an increase in other charges.”
Despite these challenges, Moret said he is optimistic about the growth prospects of the Sipp market, believing it could grow to more than £750bn in the next five years.
He said transfers from legacy defined contribution schemes are likely to increase and the Sipp market will benefit from this.
The total number of Sipps is shown in the table below:
tara.o'connor@ft.com
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