RP Inquiry: The future for SIPP and SSAS

Helen Morrissey takes a look at the results of the latest Retirement Planner Inquiry into the future of the SIPP and SSAS markets.

The SIPP and SSAS markets have both gone through interesting times over the past five years. Since A-Day, we have seen a huge surge in the popularity of SIPPs while rumours of the demise of SSAS have been greatly overrated.

While the rapid growth of the SIPP market prompted many to say there would be no demand for SSAS, we have seen the market stay resilient with demand, particularly from small businesses, remaining robust.

In this Retirement Planner Inquiry, we asked advisers to give us their views on how well they feel these markets serve their clients, as well as how they think both will develop over the coming years.

As with previous projects, we sent an email questionnaire to our readers with 108 advisers starting the survey. The first question we asked was whether they recommend SIPP and SSAS products to their clients.

More than 80% (81%) of those who answered said they did recommend these products.

Those who said no exited the survey. We then asked them to say what percentage of their clients had either a SIPP or SSAS product. More than a quarter (28%) said either 1%-10% or 11%-25% of their clients had one of these products, while a further 18% said between 26-50% of their clients had one.

Only 11% of those who answered the question said between 76%- 100% of their clients had either a SIPP or SSAS (see chart one).

Chart one: What percentage of your clients has either a SIPP or SSAS product?

There is no doubt that we saw demand for SIPPs increase markedly in the aftermath of A-Day, but how has this demand been sustained five years down the line? It would seem demand has remained strong, with 24% of participants saying they had seen demand for these products increase a lot over the past two years.

More than a third (35%) said they had seen demand increase to a small extent. Only 3% of those who provided a response said they had seen any reduction in demand (see chart two).

Chart two: Has demand for SIPPs/SSAS changed over the past two years?

Market challenges

While the advisers who took part in the survey are used to advising on these kinds of products, it is important to establish the key challenges they face.

Cost was cited by the most advisers, with a third (33%) identifying this as their main challenge. Those who elaborated on their response said they had difficulty in working out the cost structure and then having to explain it to their clients.

Billy Mackay, director of sales and marketing at AJ Bell, agrees this is an issue that needs to be addressed.