Defined Benefit  

SJP takes largest share of DB transfer business

SJP takes largest share of DB transfer business

St James’s Place (SJP) has taken the largest proportion of defined benefit transfer business over the past two years, according to recent figures.

Analysis of 1,250 transfers made during 2018 and 2019 by consultancy firm LCP, which administers 80 DB schemes, found the three most popular firms, with around 10 per cent of the marketshare each, were insurers Prudential and Royal London, and adviser SJP.

SJP was the largest single beneficiary over the two-year period with a 9 per cent share by number of transfer and 11.9 per cent by value of transfers, with an average transfer value of £500,000.

Old Mutual Wealth took 6 per cent of transfers but had a lower average transfer value at £320,000.

According to LCP, less than a quarter of all transfers went to vertically integrated advisers (wealth management firms with a financial adviser arm), with an average transfer value of £410,000. 

Traditional insurers were the biggest recipients, with 44 per cent of transfers going their way, albeit transfers were generally at the smaller end, with an average of just over £300,000.

Over a quarter of all transfers went to independent investment platforms, with an average value of around £490,000 per member.

The two largest platform providers were AJ Bell and Transact (with around 6 per cent and 4 per cent of transfers respectively), but both saw a significant fall in transfer volumes during the second year.  

Despite this, they continued to receive the largest transfer values, with the average transfer increasing by 10 per cent from £475,000 in 2018 to £520,000 in 2019.

Bart Huby, partner at LCP, said although there is a lot of focus on whether members should transfer or not, more focus should be on where the transfer ends up. 

Mr Huby said: “There is the option of an insurance company that will offer a relatively low cost product which includes the cost of managing your money, an independent investment platform where you can choose how to invest your money, or in-house investment products offered by your adviser. 

“The right answer will be different for each person, but consumers need to know they have a choice and should challenge their adviser about why they are recommending a particular destination and the different charges they will have to pay.”

amy.austin@ft.com

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