Dentons Pensions Management has today revealed plans to expand its presence in the SIPP market.
The firm says it sees a number of opportunities to grow through acquisitions as smaller providers are hit by the effects of falling interest rates.
Business development manager Martin Tilley says Dentons will look to benefit from consolidation in the SIPP market through acquisitions and organic growth.
He believes cuts in interest rates will affect the revenues of firms that rely heavily on trail from money in cash accounts.
"Some providers are making as much as 25% of their revenue by taking a cut from cash interest and, if interest rates fall further, they simply won't have the income to cover the costs of administering their SIPP," he says.
The costs associated with protected rights transfers are also expected to be burdensome for providers that have not prepared for the recent legislation.
"The process of segregating and managing protected rights, particularly for income generating assets such as commercial property, are complicated and require a lot of administration resources which some providers don't seem to be ready for," Tilley adds.
Dentons is also looking to expand organically, and will be launching two new products this year.
The firm is working on a family trust proposition, with a number of tax-efficient solutions for investors, as well as a simplified SIPP option for investors who want SIPP service but at a reduced cost.
Tilley expects the SIPP sector to consolidate in the coming years and Dentons aims to take advantage of this to grow its offering to advisers and their clients.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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