Dentons Pension Management announced today (1 February) the acquisition of Sippchoice, which will add 1,400 self-invested personal pension (Sipp) to its books, for an undisclosed amount.
The deal will see the joint Sipp providers' assets under administration surpass £4bn, with a total of over 6,000 Sipps along with 800 small self-administered scheme (Ssas) clients.
According to Ian Stewart, Dentons’ joint managing director, Sippchoice is of a size that can be easily integrated into the provider’s current business, without affecting the service that both currently provide.
He said: “We have made no secret that we would look at all opportunities to grow the business but when acquiring it has to be the right business or Sipp book.
“Sippchoice is a great fit for us with both firms sharing a similar ethos of placing the clients’ interests at the centre of everything we do.”
The provider had expressed its acquisition intentions since 2016, when it was in talks with a number of other businesses.
Hyman Wolanski, managing director of Sippchoice, argued that a host of reasons – the main one being the age of the shareholders – led the company to look for a new Sipp partner.
He said: “[Dentons] were our first choice because of our shared commitment to provide the best possible experience for our Sipp clients and their advisers.”
David Fox, Denton’s director of sales & marketing, said that the Financial Conduct Authority (FCA) capital adequacy rules and increased regulatory pressures “have resulted in a time of uncertainty for many Sipp operators”.
Consolidation in the Sipp market has been ongoing in the last couple of years as companies looked to join forces to overcome the tougher rules on how much capital they needed to hold to trade, especially where they held more unusual, higher risk assets.
In May 2016, Curtis Banks bough smaller rival Suffolk Life to become one of the largest independent Sipp providers in the UK, with the number of Sipps administered by Curtis Banks doubling after the deal.
A couple months later, Sipp provider Hornbuckle parent Embark Group bought fellow Sipp provider Rowanmoor Group.
Mr Fox added: “This acquisition is a strong statement of intent by Dentons. It is our financial stability and service reputation that makes us an ideal partner.”
FCA’s new rules came into force on 1 September 2016, and have added regulatory pressure to the market, Dentons said previously.
During 2017, 39 per cent of Dentons’ new Sipp clients were transfers from other providers, whilst 43 per cent of new Sipps were established to acquire a direct interest in commercial property, the company said.