It doesn't seem possible that it is 30 years since the then Chancellor of the Exchequer, Nigel Lawson, stood to deliver his Budget on 14 March 1989. The immortal words ‘I propose to make it easier for people in personal pension schemes to manage their own investments’ led to what is now the self invested pensions (SIPP).
Almost seven months later when Memorandum 101 was published, it was this document that mapped out the brave new world of SIPPs and the freedom of a competitive market, which saw the banks and insurance companies began to act as a SIPP providers. Almost a year to the day since the Budget speech, the first SIPP was available and purchased.

The flexibility and freedom that a SIPP provided changed how people viewed pension saving. It is innovation that has always been at the heart of the SIPP industry and that is why it has been such an exciting sector to be involved in.

But let’s not forget the SIPP sector has been through major changes over the 30 years. This started when it was first regulated in 2007, this prompted a number of the platforms to really start to grow and develop these propositions as this relaxed who could be a SIPP provider. Since then we have seen capital adequacy requirements increase, Dear CEO letters, the Retirement Outcome Review and a push by the Regulator to reduce the number of providers in the market.



Saying all this, you would possibly think that the sector may not be around in another 30 years, but that would be far from the truth. I do think it will look different, with more consolidation and a potential polarisation of the market. We are likely to see the platform SIPPs on one side and the true bespoke SIPPs at the other. Those providers in the middle ground are the ones that are likely to decide what area they are going to go down.

My fear with consolidation and fewer providers is that it will stifle innovation and inhibit the freedoms envisaged by the Chancellor back in 1989. Once we had over 120 SIPP providers, now it must be half that.

For those SIPP providers committed to the market and continuing to innovate in terms of service and product / features two areas stand out. The first is the recent growth in the use by advisers of a single fund manager, in part this is due to the pressure advisers are under to minimise the time they spend on administration. Using a DFM enables them to spend more time doing what they came into the industry to do and that is advising clients.

All in all the SIPP sector has proved itself to be adaptable and innovative, I look forward to seeing how it evolves in the coming years.

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Elaine Turtle, Director, DP Pensions