There could be 1.5 million self-invested personal pensions (SIPPs) by 2018 despite FSA regulation potentially contracting the number of providers in the market, according to John Moret.
Speaking at the 2013 Henry Stewart conference on SIPPs and Retirement Options, the More 2 SIPPs principal predicted platform SIPPs would account for half of the market by January 2018.
He said the SIPP market had grown of a rate of 35% year-on-year since 2006's A-Day, with 200,000 new SIPPs sold annually. He estimated at 1 January 2013 there were 1,029,000 SIPPs which held £122 billion worth of assets.
However, delegates heard bespoke SIPPs were beginning to slow in their rate of growth but could still reach a quarter of a million by 2018. In part this decline would be influenced by the "regulatory tsunami" affecting specialist providers.
"For me the real area of concern is regulation and that is something we do need to address," he said. "There has been a frightening amount of legislation. There [has been] a cost to the industry and customers have paid that cost."
Moret criticised the FSA's proposals for an assets under managements based capital adequacy regime as being "flawed" and a "disproportionate response to the issues raised."
He suggested capital requirements should be based on a number of SIPPs administered which hold assets which cannot be reconciled within a reasonable amount of time. Any overseas assets should have an additional surcharge, and there should be a minimum capital requirement of £50,000.
Moret also said senior managers and those in a position of influence of SIPP operators should be reapproved.
"I believe the problem is down to poor management, systems and controls. A new regime will not solve this fundamental problem. FSA have got this horribly wrong. I hope they are prepared to listen" he said.
However, Moret believed there were reasons to be cheerful despite the forthcoming changes, with a number of developing opportunities.
He continued: "We are and will continue to see people looking at drawdown as an alternative [to annuities] and that means using a SIPP. [Another] consideration post auto-enrolment is what will happen as pots grow? Will they find their way into SIPPs at a later date? And there is £250 billion left in legacy individual pensions sitting in life companies. They have a track record of poor performance and could [be transferred] into SIPPs."
Speaking at PA360 North
Speaking at PA360 North
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