In the latest of our ‘In the Spotlight’ articles we catch up with James Randall of SIPP Provider IPM.
IPM has been around for over 10 years now, but for those people who are perhaps unfamiliar with the name could you start by telling us a little more about IPM?
While I.P.M. SIPP Administration Limited was established in 1999, the Scheme was formally approved in July 1995 and known as the Rea Brothers Personal Pension Scheme. When Close Brothers took over the Rea Brothers Group, the SIPP administration business was sold to IPM, who up to this point only dealt with SSAS administration. This SIPP business, the staff, 300 clients and funds approaching £80m became I.P.M. SIPP Administration Limited in November 1999.
Today IPM is still privately owned by the same directors, and has around 4,500 clients and assets in the Scheme in the region of £1 billion.
You’re right, many readers may be unfamiliar with the name IPM and this wouldn’t surprise me. Instead of advertising campaigns or sponsorship we prefer to grow our business organically through recommendations and our intermediary contacts in the industry. This organic growth of business ensures that we can maintain our high level of service.
What are the key reasons why IFAs recommend the IPM SIPP to their clients?
There are two key areas that distinguish SIPP providers; service and charging structure. In the bespoke SIPP market I believe that the IPM offering ticks both boxes.
Our transparent charging structure is popular with our introducers and our clients. We levy a flat annual administration fee of £540+VAT, there is no establishment fee or fees for contributions, transfers in, making investments or moving client money. We do not operate panels of investment houses introducers must select from for their clients, meaning they can work with whichever DFMs, platforms, stockbrokers or banks they like, all under our flat fee structure.
We aim to provide our introducers with the technical support they need in order to enhance the service they are then able to offer their clients. As we do not operate a call centre approach this assists IPM with building relationships with our introducers so that IFAs and, if appropriate clients, can easily contact the member of staff they wish to speak with.
Our introducers also comment that the fact we are privately owned, only operate a SIPP administration and trustee business and that we are truly independent are other positives in working with IPM.
The fact you don’t charge an annual administration fee for SIPP commercial property purchase is unusual and certainly popular with our IFAs. What’s your thinking behind this?
Commercial property is an area we continue to see growing at IPM and one we like to feel we specialise in. We own approximately 750 properties on behalf of our clients and employ an experienced property team, a member of which is allocated to each purchase giving you a point of contact throughout the transaction and beyond.
You’re right in that we do not levy an annual fee to hold a property within a SIPP; we took this approach because we do not differentiate between a SIPP holding a property directly, with a SIPP that has for example four deposit accounts and two DFM (Discretionary Fund Mamagers) accounts. Usually the scheme members “manage” the property so the involvement of IPM is often limited; members have a keen interest in maintaining their property to the highest standards as ultimately it is for their benefit! It works very well as the high percentage of scheme members with property demonstrates.
We believe this transparent approach gives IPM an advantage against some of the more complex charging structures that are in the market.
Are there any future developments at IPM you can share with us?
I believe that part of our appeal is that we are consistent in what we do; providing a high level, bespoke SIPP administration and trustee service. With that said, it is important for us to evolve with the market and ensure that any legislative changes are implemented into our offering swiftly. I believe that the fact we have been in business almost 13 years and our client base growing year by year is testament to how we adapt and shows consistency in our service levels.
We are working on improving our website, with a view to making more interactive with blogs and our views on industry issues.
Turning to the wider SIPP market, what do you see as the main challenges it will face over the rest of this year and into 2013?
The recent comments by the FSA on certain unregulated investments will likely see some bespoke SIPP providers restrict the kind of investment they will accept into their offering. There have been calls for HMRC to re-introduce the permitted investments list for SIPPs and given the increasing variety of investment structures IPM are asked to comment on maybe this wouldn’t be such a bad idea.
As has already been well documented, the expected increase in capital adequacy requirements could cause some SIPP providers problems and perhaps this will be the catalyst for the predicted SIPP provider consolidation.
We’ve seen Flexible Drawdown become more popular over the past 12 months, will this be a big area of growth for you?
Whilst Flexible Drawdown has been a popular discussion point, we have not seen the take up we anticipated when the regulations were first announced. However this could well change in the coming years as clients receive their income reviews; a combination in the reduction to 100% GAD maximum, record low gilts yields and lower SIPP values has lead to the maximum income available through capped drawdown in some instances being significantly reduced.
We still feel that Flexible Drawdown will have a part to play in long term retirement planning and in particular a phased flexible drawdown approach could prove popular to clients in the correct circumstances.
James Randall of IPM can be contacted on 0845 130 3443 or by emailing firstname.lastname@example.org