Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- The market
- SIPP market is expected to go from strength to strength
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- Figure 1: Forecast of new SIPP premiums (at current prices) – Fan chart 2008-18
- Total assets under administration continue to increase in the SIPP industry
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- Figure 2: Total SIPP assets for the wealth management Industry, 2007-13
- Market factors
- Regulatory developments
- Financial advisers remain the most popular channel, but SIPPs are gaining ground
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- Figure 3: SIPP purchasing methods, August 2013
- Companies, brand and innovation
- Standard Life remains the largest SIPP provider in 2013
- James Hay launches modular SIPP
- The consumer
- SIPP ownership
- SIPP Investment ownership
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- Figure 4: Investments that SIPP owners want to hold within their SIPP, August 2013
- SIPP contribution habits
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- Figure 5: SIPP contribution habits, August 2013
- SIPP satisfaction levels
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- Figure 6: SIPP satisfaction levels, August 2013
- Most valued features and benefits of owning a SIPP
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- Figure 7: Most valued features and benefits of owning a SIPP, August 2013
- Motivations for transferring a SIPP
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- Figure 8: Motivations for transferring a SIPP, August 2013
- What we think
Issues in the Market
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- How will consolidation in the SIPP market affect consumers?
- Can taking a modular approach broaden the appeal of SIPPs?
- How can providers build and sustain their reputation?
- Will increasing numbers of consumers go direct to their SIPP provider?
Trend Application
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- Providers could turn SIPP success stories into a marketing drive
- Consumers can take control of their retirement savings
- Using technology to promote the personal touch of advice in the SIPPs market
Market Drivers
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- Key points
- Capital adequacy will lead to consolidation in the SIPP industry
- Reactions to the capital adequacy changes
- The market awaits the FCA’s third thematic review
- The FCA removes SIPPs exemption from disclosure
- FSCS will protect consumers SIPP cash deposits up to £85,000
- Issues affecting the wider pension industry
- The Chancellor reduces lifetime allowance
- The Treasury plans to cap pension fees
- Auto-enrolment
Who’s Innovating?
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- Key points
- SIPP Chat – the trip advisor for SIPPs
- AJ Bell’s Sippdeal launches free mobile dealing app
- James Hay launches modular SIPP
- Liberty SIPP reduces its offering to one product
Market Size and Forecast
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- Key points
- Assets under management continue to increase in the SIPP market
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- Figure 9: Total Wealth Management Industry SIPP Assets, 2007-13
- SIPP sales estimated to have increased in both volume and value in 2013
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- Figure 10: Volume and value of new SIPP business, 2009-13*
- Mintel expects SIPPs to become increasingly popular amongst investors
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- Figure 11: Forecast of the number of new SIPP sales – fan chart, 2008-18
- Figure 12: Forecast of the value of new SIPP premiums- fan chart, 2008-18
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- Figure 13: Forecast of new SIPP business, at current and constant prices, 2013-18
- Forecast methodology
- Fan chart explanation
Market Share
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- Key points
- Standard Life remains the largest SIPP provider in 2013
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- Figure 14: Top 10 SIPP providers, by value of in-force business, 2013 (mid-year)
- New capital adequacy rules expected to create consolidation in the SIPP industry
- SIPP market will be increasingly be dominated by larger providers
Companies and Products
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- AJ Bell
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- Figure 15: Interim financial data for AJ Bell, H1 2012 and H1 2013
- Hargreaves Lansdown
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- Figure 16: Annual financial data for Hargreaves Lansdown, 2012 and 2013
- James Hay Partnership
- Standard Life
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- Figure 17: Interim financial data for Standard Life UK, H1 2012 and H1 2013
- Suffolk Life
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- Figure 18: Annual financial data for Suffolk Life Pensions, 2011 and 2012
Channels to Market
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- Key points
- Over half of SIPP holders purchased their SIPP through an adviser
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- Figure 19: SIPP purchasing methods, August 2013
- The best of both – mixing advice and direct investing
SIPP and Pension Ownership
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- Key points
- Consumers have low levels of retirement savings
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- Figure 20: Active pension ownership and retirement savings, December 2012
- Auto-enrolment set to increase workplace pensions ownership
- SIPP ownership is low amongst the general population
SIPP Investment Ownership
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- Key points
- Simple investments are most popular amongst investors
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- Figure 21: Investments that SIPP owners want to hold within their SIPP, August 2013
- Financial advice enables consumers to invest in more complex financial products
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- Figure 22: SIPP investments, by SIPP purchasing methods, August 2013
Contribution Habits
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- Key points
- Over a third of SIPP holders make irregular contributions
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- Figure 23: SIPP contribution habits, August 2013
- The majority of SIPP holders are making regular contributions
- Advised SIPP holders contribute more regularly than direct SIPP holders
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- Figure 24: SIPP contribution habits, by SIPP purchasing methods, August 2013
Satisfaction Levels and Value of Different SIPP Features
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- Key points
- SIPP holders are satisfied with the performance of their investments
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- Figure 25: SIPP satisfaction levels, August 2013
- SIPP holders value having control over their pension savings
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- Figure 26: Most valued features and benefits of owning a SIPP, by SIPP purchasing methods, August 2013
- Advised and direct investors have different preferences
- Advised SIPP holders are prepared to take more risks to achieve higher returns
- Advised SIPP holders are prepared to pay more for good financial advice and higher returns
- Direct SIPP providers should focus on low cost solutions
- Tax efficiency is an issue which appeals to advised and direct consumers
- Ad-hoc investors seek control over their investments
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- Figure 27: Most valued features and benefits of owning a SIPP, by SIPP contribution habits, August 2013
- Consumers who contribute higher amounts are more likely to want to diversify
Motivations for Transferring a SIPP
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- Key points
- A providers’ reputation would persuade a third of consumers to transfer
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- Figure 28: Motivations for transferring a SIPP, August 2013
- Three out of 10 SIPP holders want a wider range of investments
- Over a fifth of SIPP investors would not consider transferring out
- Appetite for complex investments divides SIPP holders
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- Figure 29: Motivations for transferring a SIPP, by Most valued features and benefits of owning a SIPP, August 2013
- Price remains important to over half of consumers
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- Figure 30: Motivations for transferring a SIPP, by SIPP purchasing methods, August 2013
- Similar motivations for transferring for advised and direct investors
Appendix – Market and Product Definitions
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- Product definitions
- Self-invested personal pension
- Simple/platform SIPP
- Mid-range SIPP
- Bespoke/full-range SIPP
- Standard and non-standard investments
- Esoteric investments
- Illiquid assets
Appendix – Channels to Market
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- Figure 31: SIPP purchasing methods, by demographics, August 2013
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Appendix – SIPP Investment Ownership
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- Figure 32: Most popular SIPP investments, by demographics, August 2013
- Figure 33: Next most popular SIPP investments, by demographics, August 2013
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- Figure 34: SIPP investments, by SIPP purchasing methods, August 2013
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Appendix – Contribution Habits
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- Figure 35: SIPP contribution habits, by demographics, August 2013
- Figure 36: SIPP contribution habits, by SIPP purchasing methods, August 2013
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Appendix – Satisfaction Levels and Value of Different SIPP Features
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- Figure 37: SIPP satisfaction levels, by demographics, August 2013
- Figure 38: Most valued features and benefits of owning a SIPP, by demographics, August 2013
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- Figure 39: Most valued features and benefits of owning a SIPP (continued), by demographics, August 2013
- Figure 40: Most valued features and benefits of owning a SIPP, by SIPP purchasing methods, August 2013
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- Figure 41: Most valued features and benefits of owning a SIPP, by SIPP contribution habits, August 2013
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Appendix – Motivations for Transferring a SIPP
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- Figure 42: Most popular motivations for transferring a SIPP, by demographics, August 2013
- Figure 43: Next most popular motivations for transferring a SIPP, by demographics, August 2013
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- Figure 44: Most valued features and benefits of owning a SIPP, by motivations for transferring a SIPP, August 2013
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