Industry growth
Table 5 is similar to previous years, it looks at business levels and illustrates growth within the industry. From a glance at the Table, it looks as though the number of Sipps set up has fallen dramatically from April’s 149,348 figure to this year’s 83,955.
However, it should be noted that in April’s survey, Standard Life reported figures for all of its Sipps (64,837), rather than just the Active Money Sipp it has reported on in this survey (4,724).
The figure for both years (excluding Standard Life) tells a different story. The number has dropped, but not by anywhere near as much as before. The numbers for April would show 87,511 (rather than 149,348) and this survey would show 79,231 (rather than 83,955) – a slightly more realistic drop. It should, however, be noted that there are many non-disclosed figures.
The number that does stand out is the total Sipps lost. It was to be expected after the pension freedoms came into action in April, but whether or not it was expected to this extent in Sipps is another story. For this survey, we asked operators for the reason for the closures to make it clearer.
For example, one firm may have lost 2,000 Sipps, but this could just be due to death or it being empty. As it was the first time we asked for reasons, it is no surprise the amount of non-disclosed figures. However, looking at the Table it shows that (of the providers who returned this detail), transfers out were the biggest reason for closed Sipps. We hope that next April’s survey will see more disclosures from providers so advisers can get a better idea of why Sipps are being closed.
Increased plans
While the number of Sipps being set up has dropped within the past few surveys, the number of total plans is still rising. Last year’s overall figure for fully invested and insured plans was 701,822, while this year it is 848,870, a 20 per cent jump, which demonstrates Sipps are still growing in popularity.
The total value in force has grown with the number of plans – but by just 2 per cent to £127bn, with an average Sipp value of £242,994, 6 per cent higher than April.
Table 6 is very similar to April’s survey, giving an overview of all providers who returned a survey and their available plans. The main details have barely changed on April’s survey, but it now also includes whether or not the firm has received any external assessment or accreditation of service standards.
This could be an external award, such as Defaqto’s Sipp Star Rating service, or any internal assessments the operator goes through. With any profession, service is key to keeping customers, so assessments can be vital for a smaller firm trying to help build its reputation.
