This table, and others, displays one marked difference with those found in previous surveys. As Table 5 shows, we have split platform and ‘full’ Sipp providers for the first time, in the hope of better comparing like with like. There’s no doubt the market is continuing to split between those wrappers that – like other non-workplace pensions – typically invest in collective funds, and those that encompass property purchases and other assets. But a couple of the more flexible Sipps offered by platform providers have been kept in the main tables.
While platform providers have seen growth rates tick upwards slightly, the number of plans being opened at the likes of Barnett Waddingham, InvestAcc, DP Pensions and Organon are all up roughly 20 per cent on figures reported in our previous survey. That suggests a booming market, although a similar uptick in the number of plans being closed should not be overlooked.
An apparent drop in Suffolk Life growth rates, meanwhile, is only due to previous figures having included the acquisition of European Pensions Management.
Transfer test
Will the market remain in good health? The years of rapid expansion may look unsustainable, but absent a major correction in risk assets, it is difficult to envisage a scenario in which growth rates go into reverse.
The boost provided by the pension freedoms is a structural, rather than a short-term driver of growth. Despite this shift, Mr Moret estimates just one-third of all Sipps have started vesting. But he thinks providers have more work to do in terms of the services they provide to those taking income. Current vesting options are displayed in Table A.
Other complications are also starting to emerge, most notably in the shape of greater scrutiny of DB transfers. High-profile examples of questionable practices, in relation to BSPS and beyond, have meant the FCA is now subjecting transfers to closer examination.
As advisers await the regulator’s latest pronouncements in this area, some Sipp providers think an atmosphere of greater caution could act as a check on market growth.
“With the actuarial assumptions having turned slightly, the recent volatility in the stockmarkets and the FCA’s ongoing scrutiny of advisers and their transfer processes, I can see that we might have a reduction in transfer-derived new business during 2018,” says Dentons director of technical services Martin Tilley.
The vast majority of DB transfers will be destined for simple Sipps, rather than full-scale wrappers offering a variety of non-standard investments (NSIs). But it is not just transfers that are under scrutiny from the watchdog – non-standard assets, too, are in the spotlight. An autumn 2017 FCA request asking for details of operators’ NSIs has left Sipp providers pondering the regulator’s next move.
