5 valuable reasons you can recommend IPM to your clients with confidence
After a period of relative stability, it feels like the SIPP market is back under the microscope again in recent weeks after a couple of announcements regarding SIPP providers.
At the end of May, Money Marketing reported that Intelligent Money had entered administration after being sanctioned by the Financial Ombudsman Service (FOS).
At the same time, it was announced that a deal had been agreed with Quai Investment Services Limited for the transfer of client assets, meaning that their needs can continue to be serviced.
This comes on the heels of the ongoing saga for Hartley Pensions clients, something we recently covered after the increase in adviser enquiries we’ve received.
Earlier this month FTAdviser reported that the administrators had struck a deal with Morgan Lloyd to provide ongoing administration and trusteeship to Hartley SIPP clients, with some of these costs covered by the Financial Services Compensation Scheme (FSCS).
Since SIPPs were first regulated by the Financial Conduct Authority in 2007, the number of SIPP providers has fallen. A report by consultancy firm More to SIPPs shared by FTAdviser suggests there are around 60 active SIPP providers in the market as of February 2024.
Instances such as the scenarios with Hartley and Intelligent Money can cause concerns to individuals who have SIPPs with other providers. Advisers and their clients must carry out regular due diligence on their SIPP providers, as the landscape can change for providers from one year to the next.
At IPM, we have seen an increase in the level of due diligence firms have conducted on our business in recent years.
In the run-up to the implementation of Consumer Duty and beyond, we have seen the approach to due diligence from advisers change. There has certainly been an increase in the reports offered by third-party assessment/due diligence firms being used by adviser firms when carrying out their review of the SIPP market.
IPM has always been a well-run and profitable company, providing stability and consistency for both our advisers and the clients they introduce.
However, we are conscious that for our advisers to be able to continue recommending IPM, we need to support them by working with these firms. We may have some announcements in this regard in the coming months – so stay tuned!
In the meantime, we wanted to highlight five reasons you can recommend IPM with confidence when you are considering which SIPP provider is most suitable for your client.
1. We have 25 years of experience
2024 sees IPM celebrate its 25th year in business. We first opened our doors in November 1999, formed from a management buyout of a pension scheme previously run by a bank. The staff who ran the scheme at the bank set up IPM.
Back then we had around 300 clients and approximately £60 million of assets. We started in a rented office in Ware, Hertfordshire with three people.
Today, we have more than 5,200 clients, assets in the Scheme in excess of £3 billion, and we employ a team of more than 30 people. We now own our office in Stevenage, Hertfordshire.
This useful infographic shows our development over the last 25 years.
Being a service-based business, our people are the key to our business. We are proud to have built a diverse team over the years, but principally what is most pleasing is that most of our team have been with us for many years. More than 15 employees have been with us for over 10 years and, of those, 7 have been with IPM for more than two decades!
This continuity can give our advisers and clients confidence that we’re both highly experienced in the world of self-invested pensions and that our team are familiar with our processes and can provide assistance should you need some.
We’ve achieved our growth organically over the years. While we undertook a takeover of a small book of SIPPs in 2003, IPM has since grown our business through our relationships with financial advisers without acquiring other SIPP businesses.
2. Full investment flexibility and simple, cost-effective charging
Since we formed in November 1999, the SIPP market has evolved almost beyond recognition.
These days, most SIPP providers offer several types of SIPP, with different restrictions around investments and a variety of charging structures. Some also provide other services such as SSAS administration and investment services.
We like to keep things simple. At the outset when establishing IPM, we decided to stick to what we’re good at: administering a bespoke SIPP offering.
The IPM SIPP offers full flexibility when it comes to investments. We do not have panels of discretionary fund managers, platforms, cash management solutions, bond providers or stockbrokers you and your clients must select from. Instead, you can choose the firms and providers that best suit your clients’ requirements, subject to our internal assessments.
We’re a bespoke provider so, while we will consider non-standard investments within our SIPP, the reality is that such investments are few and far between, making up a small percentage of our overall client book.
Where we typically take on a non-standard investment it is for:
- NS&I bonds and similar products
- Cash deposits that cannot be broken within 30 days
- Hedge funds with quarterly dealing dates for financial service professionals.
Our flat annual administration fee of £580 + VAT covers the majority of the work we do for a client. We do not charge an establishment fee, nor do we charge for transfers in, contributions, making investments or moving money to/from the trustee bank account.
Commercial property is a major part of what we do, and we have one of the most cost-effective offerings in the market for this type of work.
3. We’re profitable
While we enjoy our work, like any business it is important to be profitable. This is even more important when you are a SIPP provider where regulatory requirements mean that significant, seven-figure sums need to be retained in the business to meet the capital adequacy requirements.
IPM has always been profitable, with the management team having grown the business diligently over the years. Organic growth has allowed us to grow the business steadily while controlling the costs faced by businesses as they flourish.
This approach has allowed our management team to ensure that IPM:
- Retains (and significantly exceeds) our capital adequacy requirements
- Look after our team
- Invest in technological advancements that futureproof our business and help us to generate a profit.
We have always been open with our finances. If you request our due diligence pack, you can see our profit and turnover figures since 2014. If you’d like more information, you can request a copy of our abbreviated accounts for the last three years.
4. Our business comes from FCA-regulated introducers
Most new SIPPs introduced to IPM come via FCA-regulated financial advisers.
As well as this approach best suiting IPM’s business model, it also ensures that clients receive good outcomes by taking advice tailored to their circumstances on the IPM SIPP and the investment/benefit withdrawal strategies around this.
Some of the historic issues surrounding troubled SIPP providers have related to non-regulated introducers. IPM has robust processes in place to assess the firms who introduce business to us. We enjoy working with our advisers, providing them with the technical and practical support they require when putting their advice together for their clients.
While we have processes in place for when individuals approach IPM directly (that is, without a financial adviser) this is not a core focus of our business.
We would always encourage anyone approaching us directly to seek financial advice and we’d be happy to work with any firm with who they have a relationship with. We are also not afraid to say “no” to scenarios we are not comfortable with.
5. Our ownership structure is looking to the future
On the theme of “continuity”, the shareholders who set up IPM in November 1999 are still our shareholders today, and some still retain a day-to-day role in the business.
None of these individuals have any other outside business interests, meaning that all decisions made are in IPM’s best interests. We have never needed to seek outside investment, and we are not owned by a larger parent company or group seeking to extract money from our business. Our future is in our own hands.
What does that future look like? To keep doing what we’re doing, and to keep the same approach and ethos when running our business.
Over the past few years, succession planning has been at the forefront of our minds. As such, we have formed a management committee made up of members of our team who, on average, each have been with IPM for over 20 years.
This team has increasingly taken on additional responsibilities within the business to ensure a smooth handover when required. Our hope is that when this day comes, our advisers and clients will not even notice and continue to enjoy the same high level of service and support we have been providing for the last 25 years.
Get in touch
If you want to have a chat about the potential of SIPPs for your clients, or any other aspects of pension planning, please contact us. Email info@ipm-pensions.co.uk or call 01438 747151.