Over 120,000 SIPP and SSAS savers may be owed compensation of up to £80,000 each due to errors in relation to property transfers, according to Cornerstone Tax.
SIPPs and SSAS firm Talbot and Muir has warned that a number of SSAS arrangements face “significant costs and delays” on transfers to a more suitable vehicle, such as a SIPP.
SSAS arrangements continue to be popular with advisers and their clients but at times it becomes necessary to transfer to a SIPP, the firm says.
This may be due to the sale of the sponsoring employer or other personal reasons.
Talbot and Muir says many who decide to transfer their SSAS benefits but wish to retain certain assets such as property are faced with unjustified charges and administrative delays.
While SSAS’s are not regulated by the FCA the firm said it “seems unfair” clients are not protected by the FCA’s fair treatment of clients Outcome 6, whereby consumers do not face unreasonable post-sale barriers imposed by firms to change product or provider.
David Bonneywell, director, Talbot and Muir, said: “We are seeing a marked increase in the enquiries received from IFA’s in respect of SSAS schemes that wish to move to a SIPP.
“One reason for the contact is that these schemes are facing very high costs to transfer and they are looking to see if there are ways to minimise this.
“Current administrators appear to be unhelpful with regards to the transfer and are putting restrictive internal red tape in place, in particular when a property is involved.
“A number of advisers are now recommending that the SSAS changes administrator and professional trustee, and then effects a transfer to a SIPP in a cost efficient and timely manner.”
The results for the half year to 30 June revealed continued growth with an 18% increase in new SIPP cases and a 58% increase in SSAS cases for the same period in 2018.
Meanwhile, assets under administration increased to £2.86bn and projected current year EBITDA was £1.8m with a 20% increase in the number of advisers using the firm.
Recurring income now represents 88% of turnover.
The firm says the SIPP and SSAS sector continues to be competitive with advisers using them for not only their complex cases but also for single asset or DFM options.
Despite the change of direction of some SIPP providers towards the platform market, Talbot and Muir says it is benefiting from “the vacuum left behind” and has benefited from a “growing number of Introducers who prefer the open architecture and personal service of a ‘pure SIPP’ which is often a cheaper solution than offered via a platform”.
Brian Talbot, director, Talbot and Muir, said: “We pride ourselves on our service and the value of our products and unlike some of our larger competitors we are making a genuine profit.
“We believe that the SIPP and SSAS sector will continue to grow but that there is likely to be more consolidation and we remain acquisitive for good quality books of business that will enhance our position as a leading independent provider.
“We have doubled the size of our office space, having recently moved to a new 10,000 square feet office within Nottingham city centre.
“The new space is contemporary, open-plan and will enable us to continue growing as we appoint new staff to ensure service levels are maintained.
“We are upgrading our back office systems with Delta which will continue to improve the portal functionality and client/adviser reporting that we offer.
“There has been a 20% increase in the number of new advisers using us for the first time as they look to review their SIPP and SSAS administrators to ensure they remain committed to the market and are continuing to innovate and invest in their businesses.”