STM Group is working on a suite of bespoke self-invested personal pension products following the acquisition of Carey Pensions, its chief executive has said.
In the financial services firm's annual results out this morning (March 26), Alan Kentish said STM will have an emphasis on building its UK business after acquiring the Sipp provider in October.
In addition, the firm will continue to actively seek out new acquisition opportunities, he noted.
He said: "Focus on such acquisitions will be in relation to UK workplace master trusts, qualifying recognised overseas pension scheme legacy books of business in Malta or Gibraltar, and UK based Sipp operators where the opportunity arises."
STM paid £400,000 to buy Carey Administration Holdings Limited last year, which owned 70 per cent of Carey Pensions and 80 per cent of auto-enrolment provider Carey Corporate Pensions UK, in a deal which was completed in February.
STM stated is expecting the acquisition to be earnings neutral in 2019 and contribute to profit in 2020, after the Carey business has been fully integrated later this year.
Carey Pensions is still embroiled in a court case with an investor who argued it had a duty of care towards him when allowing him to set up a Sipp to make unregulated investments, despite the sale being classed as execution-only.
Carey argued it was not responsible for the client’s failed investments as he invested on an execution-only basis and signed a contract saying this was his choice.
But the Financial Conduct Authority, which presented its views in court, maintains a Sipp provider cannot shirk its responsibilities in such a scenario.
STM stated at the time it had secured indemnities as well as the benefit of significant existing professional indemnity cover from the sellers and considered any "residual exposure to this and any other historic industry issues, to be minimal".
Mr Kentish stressed that the life and pensions business will continue to be STM’s core focus, after posting revenues of £11.5m for 2018, which compared with £10.2m in the previous year. This figure corresponds to 54 per cent of the total group’s revenue.
Malta continues to be the largest of STM’s three jurisdictions with a pensions turnover of £7.4m, up from £6.1m in the previous year, having had an additional revenue contribution of £1m from the Qrops provider Harbour Pensions, which was acquired in November 2017.
Gibraltar pensions, predominantly made of Qrops, generated £2.6m in turnover – in line with the previous year's figures, while the UK business delivered £1.6m, down from 1.7m in 2017.
STM Gibraltar last year agreed to let accountancy firm Deloitte review certain aspects of its business, including internal compliance, corporate governance and conflicts of interest across the Gibraltar-based business.
Overall, STM had revenues of £21.4m in 2018 – almost in line with the £21.5m in the previous year – and a profit before tax of £4m, unchanged when compared with 2017.