If the trend continues for platforms to outsource their systems and technology to a third party there will be increasingly little to distinguish one platform proposition from another, James Hay has said.
Speaking to FTAdviser, a James Hay spokesperson said this is a “dangerous outcome” of “margin pressure” and an obsession with pricing, which stifles innovation.
He said: “We believe sophisticated clients need sophisticated solutions rather than a ‘one size fits all’ approach.
“We have already witnessed the opening salvos of the price war, which requires a good headline rate. The service battle, on the other hand, will be fought and won on the basis of adviser advocacy which will make it a much more interesting contest.”
Looking forward in the self-invested pension market in which it specialises, James Hay believe adequacy requirements and the third thematic review will dominate debate in 2014, due to the potential impact on end investors.
A spokesperson said: “Capital adequacy is the FCA’s way of cleaning up the Sipp market and as an instrument to raise the bar and ensure competitive services and scalable propositions it’s undeniably blunt.
“So we’d expect smaller Sipp providers to be particularly hard hit. James Hay Partnership has in excess of the proposed requirement even with a large property book so we will be unaffected.
“However, that does not mean that we can afford to ignore the wider reputational damage provider casualties could have on the pensions market as a whole or the plight of those investors who could find themselves cast out of pension saving through no fault of their own if their Sipp provider is the one that goes to the wall.
“These are both points that, for once, it would be good to see some genuine industry-wide collaboration to ensure savers are not either financially disadvantaged or put off making provision altogether as a result of regulatory change.”
In terms of proposition development, the Sipp provider will be looking to evolve its modular approach to retirement wealth planning and “build on the successes of 2013”.
A spokesperson said: “We’re playing our cards close to our chest regarding the details at this stage but you won’t have long to wait before we’ll be announcing how we intend to build on the solid foundations laid in 2013 and using our systems flexibility to apply fresh thinking to solve old problems simply in a market so often hamstrung by complexity.”
