At the end of my last blog post I promised to consider how we might look at the last golden decade or more in SIPPs. Here goes …
Twelve years ago, I didn’t have a mobile phone, no PC at home and the number of channels on my television leapt by 25% when Channel Five went live in our region. How things have changed! The same goes for my SIPP provider employer: we had no email, we used various cleverly-adapted software of the sort you might have found on home PCs at the time – what your Dad would call “wartime ingenuity” – and there were fewer than 20 of us in the one town-house-turned-office. We really wanted to please and tried very hard to do so.
Well, you’ve probably seen the charts. The SIPP market grew at a frantic, auction-fever-like pace and so did my employer and pretty much all of the other SIPP providers. And that’s really my point: SIPP providers were in the right place at the right time. Increasingly, as the market develops, they are going to have to prove that they are more than just randomly lucky, they are going to have to prove that they have what it takes.
One thing that I’m sure won’t change is that things will go on changing. Amazing (and pleasantly nostalgic) as it is to look back and marvel at the changes since 1999, to coin Ronald Reagan’s phrase “you ain’t seen nothing yet”.
Yes, we’ve got RDR, the (very welcome) end of commission and introduction of adviser charging, auto-enrolment, flexible drawdown, and all sorts of other changes to the regulations around pensions and advice. But I think Philip Calvert is right in his insistence that RDR is a side-show compared to the impact that technology will continue to have.
“you ain’t seen nothing yet”
The rise of platforms, as relentless as The Terminator, will be a major factor. Technology integration – online forms, straight-through processing (STP), real automation of almost every process from SIPP provider to platform to adviser back-office – will redefine what good service looks like and threatens to smash margins, too.
Real people will still be needed but for different reasons. Not for basic admin, accounting, reconciliations, data handling, statements and so on, which will be done by computers with a speed, efficiency and accuracy beyond mere mortals. But knowledgeable, qualified people; imaginative people; real people who are approachable and sociable: they will be needed. Sipphound likes to say “people like to do business with people they like”.
To return to my title, when SIPP providers look down the technology barrel, they will need to know whether 5 shots or 6 have been fired and what they are going to do about it. Luck won’t come into it.