The pace of consolidation in the SIPP market moved up a level this week, with the news that Mattioli Woods has agreed to buy rival SIPP provider, Ashcourt Rowan.
Mattioli Woods announced this morning, that they have bought the SIPP (Self-Invested Personal Pension) and SSAS (Small Self-Administered Scheme) business of Ashcourt Rowan for a reported £1.3 million.
The deal will see Leicester based Mattioli Woods add an additional 600 SIPPs and 150 SSAS schemes, with extra assets under management of £300 million, to their existing portfolio.
Commenting on the deal, Ian Mattioli, Chief Executive of Mattioli Woods, said: “Ashcourt Rowan has an excellent reputation for building first-rate client relationships. As financial markets change, there is real synergy in organisations like Ashcourt Rowan and Mattioli Woods entering into strategic partnerships to deliver better service and long term security for clients. We look forward to developing a strong relationship with Ashcourt Rowan and its advisers.”
Whilst Jonathan Polin, Group Chief Executive of Ashcourt Rowan, said: “As Ashcourt Rowan continues to make significant strides across its business units it is important as a management team we focus on our core. The administration of SIPP and SSAS schemes is not core to our business. We have found a strategic partner with the expertise, scale and systems to give the very best service to our clients.”
SIPP mergers gather pace
The latest deal comes on the back of Dentons buying RSM Tenon Pension Trustees in March and the acquisition of a number of Alliance Trust SIPPs by Curtis Banks late last year.
Following the FSA’s capital adequacy proposals, announced last year, which will force most SIPP providers to significantly increase their reserves, many industry experts expect the consolidation in the market will continue. Ian Mattioli said: “With increasing complexity and continuing consolidation in the SIPP sector, we anticipate there will be further opportunities to expand Mattioli Woods’ operations, both organically and by acquisition.”
Another Leicester based SIPP provider, Hornbuckle Mitchell, who last week were taken over by a group of private investors, are also looking to acquire smaller SIPP providers. Quoted on Citywire, Phil Smith, the new Chief Executive of Hornbuckle Mitchell, said: “I’m convinced opportunities for expansion will come along, but I would class us as intelligent buyers: everything must be right. There are some fantastic businesses operating with assets under £2 billion, or much smaller, which operate great franchises with great service for clients.”
“Anybody with assets under administration of £2 billion is going to find it quite hard to stay in the game and make money, and invest to provide the client service required over time.”
Industry experts are divided over whether the current increase in mergers and acquisitions is a good thing for SIPP consumers. Whilst it is likely to create stronger, more financially stable SIPP providers, it will undoubtedly reduce choice, which could make SIPPs less flexible in years to come and possibly more expensive.