I’m speaking at the Henry Stewart SIPPs & Retirement Options briefing on 28th March on “Where now for SIPPs” and I can’t resist giving a little taster.
The session essentially asks that I predict the future, something that weather forecasters attempt on a daily basis with an enthusiasm seemingly undimmed by their unerring fallibility. So I looked closely to see if I could pick up any tips and realised that one of their tricks is to spend a good bit of time talking about what the weather was like earlier today – and what it will be like tonight when most won’t notice anyway. So I set off on a mental journey down memory lane, and a very pleasant amble it was, too.
“it’s easy to think of the tiny steps as laughable but … the journey is genuinely awesome”
My journey through the working world of pensions started in 1999 in the then new, frontier-land of SIPPs. I remember when the company’s first website was put up on this new thing called “the internet”. It was a single static page with a few dozen words and a picture of the managing director. Thinking of it now conjures an image of us as toothless simpletons, gawking at this “amazing” spectacle. (I also remember, as an aside, hearing about this new thing called “Google”, thinking what a stupid name it was and disliking even saying such a silly, made-up word!)
In retrospect it’s easy to think of the tiny steps as laughable but, standing back, the journey is genuinely awesome. No more deals placed by phone while the client waited. No more entering transactions, detailed on a paper contract note delivered by post, on to a database. No more phoning for comparative annuity quotes for illustrations.
An unstoppable juggernaut called technology careered through the SIPP business and you either jumped on or got squashed. It put applications, illustrations, dealing, valuations, statements and more online. These days there are SIPP providers that will email me to tell me my statement is ready to download. I can X-ray my portfolio – something that would have sounded every bit as random as “Googling” back in 1999. I can even deal via an app.
If you think that’s where it’s going to end, then you are like an ant which, on reaching the edge of the table-top it’s on, thinks it has discovered the universe. SIPPs, PPPs, drawdown and much more will scarcely be recognisable within our lifetimes. What’s innovation today will be mere “sausage machine” tomorrow. This is a game where scale counts but does not guarantee success. Standards and standardisation will roll over all they can and what they can’t will be discarded and largely forgotten. The beasts will get bigger and when one falls, the crash will shake the whole eco-system.
So what are the practical lessons?
First and foremost, heed this: like me, you cannot predict the future. So you’d better be prepared to change your mind!
Some sausage machines will cover more of the process and work better than others and you need to try to work out who’s got a really good one. You may not get it right but I refer you to my point above.
Things will change and they may change fast. So “fire and forget” is not an option.
All good sausage machines need a good supply of meat, which is why those with a slick machine so often seem to have slick marketing. But be careful: they aren’t the only ones!
And lastly, you can be sure that the survival rate among those making their SIPP sausages by hand will be dire.