In this situation it is unlikely many books of business will be sold. The small provider who entered the market after A-Day and has a relatively small portfolio of schemes will not be under pressure to sell and will almost certainly continue to operate. Insurance companies have already disposed of their portfolios. Advisers who came into the market as administrators may still have books of business, and with less stringent capital adequacy requirements, are not likely to be under pressure to sell and are unlikely to do so unless the price is right, or they are concerned about retaining scheme administrator responsibilities.
It is unlikely many providers will look to expand their portfolio by picking up small books in isolation. We are therefore left with those who have both Sipp and SSAS books where, for Sipp capital adequacy requirements, releasing capital from their SSAS portfolio is vital. This may lead to consolidation in the run up to the new capital adequacy requirements for Sipps coming into operation. It is difficult to see why there should be any consolidation within the SSAS market after that time.
Does the possibility of M&A have any impact on the industry? Probably not significantly. Larger practitioners have no need to sell and will continue to dominate. The very small practitioner who does not have a Sipp operation alongside their SSASs will not need to dispose of that portfolio and will continue in business.
Ian Hammond, managing director, Rowanmoor Group
