The pensions dashboard and the 'pot for life' could all boost the Sipp market and drive its size to £750bn, according to John Moret, principal of MoretoSipps.
Speaking at the Amps annual conference last week, Moret said he expected the Sipp market to grow to £750bn from its current size of £500bn by 2030.
He suggested almost all of this growth would be achieved in the “streamlined” Sipp sector driven by investment platforms and newer fintech Sipp providers.
Other opportunities for growth in the Sipp market he cited included:
- The growth of technology in hte unvested Sipp market
- Under-provision in the self-employed market
- The impact of the pensions dashboard
- The adoption of the "pot for life" model
A poll of a third of the 110 Amps members showed there was agreement that adoption of the “pot for life” model would have the most positive impact for the Sipp market.
Chancellor Jeremy Hunt announced in last year's Autumn Statement he would consult on giving savers a legal right to require a new employer to pay pension contributions into an existing pension pot. This closed at the end of January.
In March's Budget, the chancellor reiterated the government's commitment to exploring a lifetime provider model for defined contribution pension schemes in the long-term. But the outcome of the government's consultation has not yet been published.
But Moret thought regulatory overheads could cause a halving of complex Sipp providers – with only 20 likely to be active in five years time.
A poll of the audience showed there was agreement a reduction was likely but not quite as drastic as Moret suggested.
In another poll of the audience looking at the consumer duty, the potential for retrospective application of the rules by the Fos and the lack of clarity around guidance and advice were seen as the biggest worries for providers.
Commenting on the latter, Moret said all Sipp and other pension providers needed to consider very carefully the nature and level of guidance and support that they should provide.
He said: “This is particularly important in the Sipp market where MoretoSipps recent market report had highlighted that two-thirds of Sipps operate on a non-advised basis and less than 15 per cent of Sipp investors had vested their benefits.
“That implied that nearly three million Sipp investors are faced with the complexities of retirement - with no adviser. That has to be a real concern for all Sipp providers with non-advised clients.”
Moret also criticised the regulation of Sipps saying the framework “is not and never has been fit for purpose”.
He referred to recent comments by politicians criticising the FCA for doing too little too late in reference to the Woodford scandal and said that he felt that similar criticisms should be levelled at the regulator over their failure to effectively regulate the Sipp market.
amy.austin@ft.com
