Contents:

CHAPTER 1 DISTRIBUTING SELF INVESTED PENSIONS 7. Introduction 7 There are two key types of self invested pensions 8 SIPPs 8 SSASs 8 IFAs are the key distributors of self invested pensions at present 8 IFAs are the dominant distributors of self invested pensions 8 Independent financial advisers are domoninant in the sale of both insured SIPPs and SSASs 9 Simplification will have positive implications for self invested pensions 11 Simplification is a major regulatory change 11 Simplification will encourage wealthy customers to save through self invested pensions 12 SIPPs will grow rapidly following Simplification 13 Simplification will drive new business for distributors in a number of ways 14 Complex regulation requires expert advice 14 Greater freedom of allocation and vesting requires ongoing advice 15 Asset under management fee structures will benefit distributors in the longer term 16 New Style SIPP distribution will diversify while IFAs will continue to dominate the New Style SSAS market 17 A wide range of channels will benefit from the growth in SIPPs 19 IFAs will continue to be the most important channel for SIPP and SSAS distribution 19 Multi-tie advisers will take a share of SIPP distribution 23 Private banks have a major opportunity through Simplification 24 Stockbrokers will launch low-cost SIPPs 27 Group SIPPs offer Employee Benefits Consultants (EBCs) a way back into the self invested pensions market 27 Online SIPPs will see major growth in volumes 29 Universal Bank's will have all the capabilities needed for a strong self invested pensions offering 31 Over the counter sales will become a smaller niche in the SIPP market 32 Action Points: Action is needed now to take advantage of Simplification 33 CHAPTER 2 APPENDIX 35. Supplementary data 35 Definitions 38 Research methodology 42 Distribution forecasting model 42 Our Life and Penisions Forecasting model 43 Specialist pensions new business total premiums held by insurance companies are hard figures taken from the ABI. See above for the definitions used by the ABI. 43 SPP writing team 43 LIST OF TABLES Table 1: SIPP and SSAS new business premiums, split by distribution channel 2004e 35 Table 2: SIPP and SSAS new business premiums, split by distribution channel 2009f 36 Table 3: Specialist Pensions new business premiums held by insurance companies, 2004 36 Table 4: Which of the following specialist pension products do you currently sell? 37 Table 5: Over the next six months how do you expect sales in each of the following products to change? Converted to scores 37 Table 6: SIPP & New Style SIPP, New Business Total premiums by distribtion channel, 2004e-2009f 38 Table 7: SSAS & New Style SSAS, New Business Total premiums by distribtion channel, 2004e-2009f 38 LIST OF FIGURES Figure 1: IFAs are the dominant distributors in the SIPP and SSAS markets, 2004 9 Figure 2: Distributors regulated as Independent financial advisers distribute almost 75% of insured SIPPs 2005 10 Figure 3: The insured SSAS market is very small and almost entirely distributed by Independent Financial Advisers, 2004 11 Figure 4: Wealthy customers can have more complex and differentiated pensions following Simplification 15 Figure 5: The distribution of SIPPs will be diversified as the SIPP market expands 2004-2009 17 Figure 6: SSAS distribution will continue to be led by IFAs 18 Figure 7: Which of the specialist pension products do you currently sell? 20 Figure 8: SIPPs are the pensions product that IFAs are most positive about, Spring 2005 21 Figure 9: IFA's SIPP sales will grow by 17%, 2004-2009 22 Figure 10: Regulatory change will create a Multi-tied channel for SIPP distribution 24 Figure 11: Private banks will increasingly utilize new style SIPPs as part of their investment services 26 Figure 12: Group SIPPs will drive SIPP distribution through Benefits Consultants 29 Figure 13: The Internet will become a significant channel for SIPP sales 30 Figure 14: Retail banks will increase SIPP sales at the lower end of the market, 2004-2009 31 Figure 15: Over the counter sales will continue to play a significant role in the SIPP and SSAS markets 33