Andy Bowsher, head of Sipps and Ssas at Xafinity, notes: “The days of non-standard investments being allowed in Sipps are perhaps numbered with the recent Berkeley Burke court case. Ssas providers have to be equally diligent that their Ssas is not being targeted by the unregulated brokers looking to place their high-risk products.”
Mr Bowsher suggests some advisers may need to boost their knowledge of the Ssas market.
“Ssas have a unique place in UK pensions provision, especially for SME [small and medium-sized enterprise] directors, but there is little financial education out there for newer financial advisers,” he says.
“[They] really need to team up with an experienced provider for their first Ssas – there should be plenty of help available. Once we’ve helped an adviser through the first one, they’re typically keen to present the opportunity to further clients.”
Offering consultancy services for retirement planning and investment is far from a consensus option among providers. Almost all companies can provide general consultancy, but only seven and five firms offer retirement or investment advice, respectively.
Although there are different types of Ssas available, all but one provider solely offer a full scheme, as Table 3 highlights. IPM is the only firm to offer hybrid (a mixture of defined benefit and defined contribution) and deferred Ssas.
Dashboard difficulties
How the Ssas market will look in future may in part be dictated by broader pension changes due to take place this year. Some think the government’s pensions dashboard initiative, which does not currently encompass Ssas, could yet be expanded to include such providers.
Mr Jones-Tinsley notes that one of the main concerns regarding the project’s success and usefulness is the extent to which pension providers will be compelled by legislation to release their members’ data, with their consent.
He says: “The Department for Work and Pensions intends to legislate for compulsion ‘when parliamentary time allows’, although [it] envisages exemption from this requirement for certain schemes, including Ssas.
“The reason given by the DWP for this voluntary participation is that Ssas members ‘would be significantly less likely to need to use a dashboard’. It will be interesting to see if this sweeping assumption is borne out within responses to the consultation, as well as the resource implications for Ssas trustees and scheme administrators if participation in the dashboard project ultimately becomes compulsory.”
But the dashboard’s impact on the Ssas market will be minor in comparison with both the cold-calling ban and, in particular, HMRC’s continuing clampdown on the registration process.
Given the unique structure and benefits of Ssas, the market should ultimately be able to ride out these difficulties – but the road ahead may have a few more bumps yet.
