The venerable small self-administered scheme (SSAS) has been with us as a pensions option for well over 50 years now.

It was the true progenitor of self-investment in the pensions industry, leading the way to more opportunities for business people to save for later life.

Over the years, however, SSAS has become somewhat forgotten, particularly once Sipps exploded onto the scene in 1987. Sipps seized the centre stage of self-investment, though the Sipps of today look very different to those early schemes.

Decades of product development have brought the rise of the investment platform, which, although versatile and holding a vice-like grip on the majority of the Sipp market, doesn’t really encapsulate the true spirit of self-investment.

Many planners, perhaps even most, will have never dealt with a Ssas, let alone recommended its use

The challenge is that, alongside this relentless development of Sipps, the client and adviser demographics have also greatly changed. The old guard of pure advisers is slowly ebbing away and a new generation of planners are taking their place.

Many planners, perhaps even most, will have never dealt with a Ssas, let alone recommended its use.

Is SSAS even relevant in today’s world of financial advice?

Yes, I say, absolutely – perhaps now more than ever.

The entrepreneurial self-investment capability still has a solid place within the advice sector, particularly to meet the practical needs of small and medium-sized enterprises – in other words, business-owning clients, who will be on virtually every planner’s books.

Loanbacks – where the scheme lends up to 50% of the scheme value to the sponsoring employer – are highly attractive to business owners

One of the key roles SSAS can play is the opportunity to associate the client’s business as a sponsoring employer. This unlocks that wonderful SSAS specific feature: the loanback.

Loanbacks – where the scheme lends up to 50% of the scheme value to the sponsoring employer – are highly attractive to business owners. This gives access to low-cost funding that can generate business expansion.

There are, of course, rules, or tests, to ensure these loans are compliant with HM Revenue & Customs stipulations, though these are considerably less onerous than the typical lending process deployed by most institutional lenders.

When Sipps began to rule the roost of self-investment, up until around 2012 with RDR, and most certainly from 2016 onwards with the introduction of provider capital adequacy rules, they were the go-to option for anyone looking at non-retail investment solutions. One of the most popular avenues of that time was investment in private company shares.

SSAS will be around for a long time yet. However, I acknowledge it isn’t as popular as the Sipp and has a much smaller target market

These non-standard investment solutions no longer exist in the Sipp world – we could even regard them as extinct.

With SSAS, however, many non-retail asset classes can still be chosen. Furthermore, even when rare Sipp-based private share investment proposals are available, SSAS and loanback can often combine to offer a robust alternative solution.

All sounds great, right? So, why my concern about SSAS extinction?

I believe SSAS will probably be around for a long time yet. However, I acknowledge it simply isn’t as popular as the Sipp and has a much smaller target market. And so, as those advisers familiar with SSAS head into retirement, it’s vital the next generation understand and embrace the product and its many unique capabilities.

For me, it’s a perception thing – SSAS is indeed a ‘legacy’ product. Many of the new generation of advisers weren’t alive when it came into being. Amazingly, many weren’t even around for the advent of Sipps.

Let’s re-think, embrace and celebrate SSAS and the long future it clearly has ahead of it

Perhaps I am being unfair here, though it does feel at times like some people are conflating the legacy feel and age of SSAS with it being obsolete. Equally likely, it’s the perceived complexity of SSAS that’s an issue, particularly in contrast to the hyper-evolved offshoot of those first Sipps: the platform.

Ultimately, clients using SSAS are taking on a more involved role as trustees, with key decision-making responsibilities. Perhaps this alone creates a fear of things going awry.

Nevertheless, when we truly understand its capabilities, it’s hard to draw any conclusion other than, actually, SSAS is absolutely suitable for a segment of today’s clients. And with client outcomes at the heart of the decision-making process, the right solution should always trump other factors, like inherent bias.

The key for the latest generation of advisers and planners is to ensure they obtain the right support structure from the provider they use for SSAS. This includes receiving technical guidance that removes complexity, along with gaining added confidence when recommending SSAS where suitable for client needs.

So let’s re-think, embrace and celebrate SSAS and the long future it clearly has ahead of it.