Small Self Administered Scheme  

Advisers 'shy away' from Ssas products

Advisers 'shy away' from Ssas products

Advisers still shy away from small self-administered schemes because of limited opportunities to earn money from them, according to Whitehall group director Richard Mattison. 

Speaking to FTAdviser, Mattison said the purpose of Ssas’ is really for company directors and business owners, stating they are appropriate for the entrepreneurs because of the flexibility that they provide. 

“You can't get a more flexible type of pension scheme in this country and they're still specialist and still niche,” he said.

“They're not a mainstream product and a lot of advisers don't seem to understand them. They basically shy away from them, find them too complicated and they don't see how they can make money out of them so a lot of advisers would almost discount them as well.”

Mattison argued there was a lot of scope within the product for flexibility that you were unable to get anywhere else. 

“There is no other pension product like this, where you get all these tax benefits that you get from a registered pension scheme and they can do all this other stuff at the same time.” he said. 

“I feel that [advisers] do not see where they can earn money. The standard way that an adviser earns money for pensions is sticking on a platform and picking up half a percent per year, plus a bit of stuff around the edges of transfers. 

“They don't see Ssas as being platform friendly products because clients are doing other things with the money, buying properties and making loans so if they don't see platform potential, they don't see the earnings potential. 

“They either just don't bother with it or they don't recommend clients have that kind of product where it may well be the right product for them.” 

Mattison argued that advisers will often say they do not offer Ssas as they are not suitable for clients.

“The idea is that not only do they do commercial properties, but they do loans to client businesses, loans to third party businesses, private equity in clients’ companies and in other companies. This is the unusual stuff that Sipps used to do, but don't anymore and Ssas still do.”

But chartered financial planner Greg Neall of Wake Up Your Wealth argued that while Ssas’ were typically sold for up front tax benefits for property purchase, it was still a retirement plan for all those concerned and an exit strategy had to be agreed. 

“Whenever I have shown clients the tax benefit over the lifetime of the main business owner, including sale of the property and payment out of benefits, the tax savings have not outweighed the complications, costs and liquidity risks and none of them have ever proceeded,” he said. 

“My view is that Ssas fall into the same category as transitional tax free cash protection: they are a niche and obscure solution resulting from near obsolete legislation, which deliver a miniscule benefit to consumers across the industry, and they should be got rid of to make the world of pensions simpler for all.”