For someone who works for a firm with Sipp in the title, I’ve spent a fair bit of time talking about the small self-administered scheme (Ssas) market.
As I’ve highlighted in previous Money Marketing columns, this part of the pensions market doesn’t always get the recognition it deserves. So, when the opportunity presents itself and important issues are happening, it’s worth banging the Ssas drum.
Like most things, though, it’s not perfect. And that’s why, in my last piece, I also highlighted the need to build more trust in this market.
The FCA has highlighted what an important sector the market is – holding more than £205bn of pension assets for 1.7 million customers
It got me thinking about the wider Sipp landscape and the challenges we face in getting people to have confidence in the sector.
That’s not to say the market hasn’t grown or isn’t likely to continue to do so. If the estimates are anything to go by then it could be a very attractive sector in just over half a decade.
But let’s face it, we still see headlines which continue to do damage to the Sipp brand.
Trust takes time to build and barely any at all for it to be broken or lost completely. But while standards have been, and continue to be, raised, the compounding effect of adverse news sets the industry back.
We need to keep doing as best we can to show a few bad apples haven’t spoiled the entire barrel
It’s a real shame because there are so many positives and a great many firms provide high levels of service and do the right thing by their customers. Exactly how it should be.
If we don’t shout a bit louder about the good customer outcomes being achieved, we risk the hard work being drowned out.
And if a greater proportion of savers turn to Sipps in the coming months and years, we want them to be faced with a more positive outlook.
Sipps vary substantially in complexity, suggesting there’s room for both the non-advised and advised areas to grow.
As the industry filters out the issues clogging the system, it may take a little while longer yet for the water to completely run clear again
Some investors will have simple requirements while others will have more difficult investment needs concerning commercial property, for example.
It’s important both advisers and investors feel they can trust Sipp operators. But trust is hard earned and rightly so.
Understandably, firm failures (and the customer outcomes that invariably follow) decimate confidence and, in turn, trust in an instant. Just a couple of months ago came the news Sipp operator Intelligent Money entered administration.
But as the regulator points out, a number of the problems tend to relate to historic issues. Some of those issues take longer than we would expect to come to light. That can give the impression the Sipp sector has a bigger problem than it does.
As the industry filters out the issues clogging the system, it may take a little while longer yet for the water to completely run clear again.
If the estimates are anything to go by then it could be a very attractive sector in just over half a decade
But that is not to say just historic issues are holding the sector back.
There are still strides to be taken raising service standards (particularly in transferring assets between providers) and making sure good value is routinely delivered (across the lifecycle).
And there is always more we can do, as an industry, to combat frauds and scams.
While it may not be problem-free (what is?), it’s probably more of a glass half full situation as opposed to a glass half empty.
Things are improving. Consumer Duty is now in full swing and has set a higher expectation for the standard of care financial services firms give customers – rightly focusing on customer outcomes.
The FCA has urged Sipp operators to ensure we have appropriate systems and controls, as well as operational and financial resilience
While many in the sector will have been operating as though they were always being judged by such high standards, investors could be forgiven for being sceptical about Sipp firms and plenty of others for that matter.
The FCA has urged Sipp operators to ensure we have appropriate systems and controls, as well as operational and financial resilience.
It has highlighted what an important sector the market is – holding more than £205bn of pension assets for 1.7 million customers.
The numbers show we must do everything we can to rebuild the reputation of the Sipp market.
We need to keep doing as best we can to show a few bad apples haven’t spoiled the entire barrel.