Developing the SIPP and SSAS market

Christine Hallett talks to Retirement Planner about the demand for SSAS, as well as how QROPS and QNUPS can interplay with SIPPs

What challenges are you facing in the market right now?

I think the key challenge we are facing right now is about product differentiation.

Over recent months we have seen the launch of products such as eSIPPs, Family Trusts etc.

Some are online only, others are execution only – what does all this mean for the adviser and their client? The different names being used are confusing and make it harder for clients to compare products like for like.

Advisers will really need to drill down into what exactly it is their clients need from these products.

In terms of other challenges, pricing pressures tend to be an issue too as different pricing structures can again prove confusing for advisers and their clients.

We are also seeing issues with regards to all providers gaining critical mass. With pricing continuing to face downward pressure, we risk operating in a volume driven market which can make providing a quality service extremely difficult.

I know you offer SSAS to your clients. What kind of demand are you seeing for these products right now?

We do offer SSAS as we wanted to offer our connections the whole range of pension products.

Initially we thought business would primarily be transfers from other SSAS providers but we have actually seen a lot of new business.

I think this demonstrates that advisers really are taking the time out to consider which tax wrapper is most suitable for their clients.

We have continued to see demand for loanbacks to enable small business to continue to expand in these difficult economic times.

The loan to the company is charged at a commercial rate of interest and so could generate more than you would get with a bank deposit or even some investments.

One of the major changes over the past year has been the introduction of flexible drawdown. Have you seen much demand for this since it was introduced in April?

A number of providers, including ourselves, did declare it was their intent to offer flexible drawdown from April.

However, Royal Assent for the Finance Act only came through on 19 July and so while we have had enquiries we had no requests to actually do flexible drawdown.

Clients want to know about the charging structure and what we will require from them in terms of declarations as to whether they meet the minimum income requirement.

People held back from doing something solid until Royal Assent was granted in case there were some last minute tweaks.