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Big is best?

17.10.2013

My very first blog 4 years ago had this title, with Curtis Banks barely out of the starting blocks and some doubts as to whether we actually had any clients at that point. I remember it well it was actually my first day here.

Fast forward to the present and it’s not so easy for me to be having a go at the bigger SIPP providers, now we’ve joined the club. A survey just out put us at Number 8 in terms of assets under management and if you take out the companies who don’t specialise in what I call Full SIPPs, it supports our claim to be a Top 5 Full SIPP provider.

Of course we still feel that while being a large provider has it’s benefits what is more important to our clients and intermediary relationships is the level of service we provide and this holds true from the 2009 blog. It is the poor service levels from many of the larger SIPP providers which have resulted in double digit attrition rates from those providers - so service very much remains in the forefront of our minds at Curtis Banks.

The most interesting statistic in the survey though (if you’re interested in statistics that is) is the average SIPP size, at around £350,000 we are by some margin the biggest. The smallest in the survey is an average of £69,000, which of course develops into the “what is a SIPP?” type of argument which has been running ever since SIPPs expanded into the wider market.

Does size matter? Well, there is certainly a feeling that a “proper SIPP” only makes sense if the fund is a reasonable size, and small fund sizes raise doubts about whether some of these people should have SIPPs in the first place. Interesting that the Full SIPP players in the survey all had decent average fund sizes, back to the “what is a SIPP?” argument again.

Large fund sizes does of course count against us in the proposed capital adequacy rules – a penalty for doing what is expected of us and running decent sized SIPPs. There are of course lots of other reasons why basing capital adequacy on fund size doesn’t make sense and these have been well publicised, let’s hope that they have been taken on board when the FCA publish the final rules. Suffice to say, though, that we will be OK if the rules did go ahead on the draft formula.

Did I expect when I wrote that first blog that we would be where we are today? Probably not, the SIPP market has changed hugely over the past 4 years and is in the middle of a huge shake-up now. We have got ourselves into a pretty good position, though, to weather the storm and come out on top.   

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