Malta-based pension provider Momentum Pensions has launched a self-invested personal pension, in a move to become a significant player in the domestic UK pensions market.
The move represents a major shift in strategy for Momentum, which until 2014 exclusively provided offshore pensions in the form of qualifying recognised overseas pension schemes (Qrops).
The new Sipp gives members access to investments via 12 discretionary fund managers, making it a simpler and cheaper alternative to its existing full Sipp service, which it launched in 2014.
It also offers members the option to switch, free of charge, into a Qrops if they decide to move abroad – a feature the firm claimed was a “unique proposition in the UK”.
The group’s chief executive Stewart Davies said: “Adviser feedback was telling us there is an increasing need for a Sipp that allows flexible, multi-jurisdictional switching.
“The Momentum Sipp is the first in the UK to offer this, and with our quality discretionary fund manager partners we are confident that we have created a fully flexible product that advisers can recommend to their clients.”
Mr Davies told FTAdviser he hoped the Sipp would attract 5,000 members within five years, adding the firm would look for opportunities to acquire Sipp books from other providers.
He said the original move into the UK was intended to give expat clients the option of opening a domestic, FCA-regulated Sipp rather than a Qrops.
But since then – particularly thanks to pension freedoms – he said the UK had become an attractive market in its own right.
In addition to its Malta headquarters, Momentum has offices in Gibraltar, the Isle of Man and Manchester.
It has about 5,000 members, with 4,000 of those in Qrops and the remainder in its full Sipp. It administers around US$1bn (£700m) in assets.
The new Momentum Sipp has a minimum transfer threshold of £40,000. The set-up and annual fee stands at £250. The cost of moving into drawdown is also £250, with a £100 annual fee.
Christopher Foster, a financial adviser with Pennines IFA, said the product sounded reasonable, but added it was on “the expensive side of cheap”.
He said the Sipp’s exclusive use of DFMs was not a limitation for most people, as “most clients only need access to funds”.
While he welcomed the Sipp’s transparent pricing, he said it was hardly a unique selling point as simple pricing had become the norm.
As for the company’s background as an offshore Qrops provider, he predicted this would “ring alarm bells” with many advisers.
Mr Foster said: “I’ve been doing this job for 22 years, and in all that time I’ve only ever recommended one person – a professional footballer who was moving abroad – to go into a Qrops. And in the end he decided not to do it.”
Responding to claims the word Qrops carries negative connotations, Mr Davies said: “One thing I can absolutely assure you on: there is no let up in the level of regulation in the three jurisdictions [of Malta, Gibraltar and the Isle of Man].