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The great SIPP sell off

Whilst all the big debate and attention has been focused on the power struggles between fund mangers, fund super markets, wraps and life cos, slowly a change is happening.

Various papers relating to the SIPP market are changing the landscape. Smaller books of SIPPs are being bought up at a rate of noughts.

Reasons have all been “it’s not core”. No doubt some truth in that, but I’m sure new rules and disclosures will play a part.

Whilst at this stage these books are being bought up by other specialists it makes me think how specialist the market will be in 5 or so years time. Lots of talk about consolidation in the platform world. I think the SIPP world will be first.

Lots of due diligence will have been done I’m sure. These books are small, but the assets likely to be complex and potentially riskier than you find in mainstream. The good news is the guys buying them up do know what they are doing – but with any acquisition new risks will emerge.

I hope the consolidation doesn’t lead to a vanilla SIPP market. The variety will keep it healthy, but it wouldn’t surprise me if in a few years maybe only 25% of the providers today will survive.

We will once again I suspect be having the debate about big, small, life co, new model in the SIPP market too.

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