For Friends Life, SSASs are no longer a primary stream of new business, having written only nine new schemes in 2012. Addressing its reduction in business, it said, “For an old book of business, we do not deem an annual reduction in schemes of less than 7 per cent, with a reduction in asset values of less than 4 per cent, to be an excessively high rate of attrition.” It said that the majority of scheme terminations are due to customers choosing to transfer their benefits to a replacement product, “sometimes as part of their retirement strategy”.
Price and proposition
When selecting a SSAS provider, getting to grips with what is offered and how much it costs is imperative. Table 2 gives a detailed breakdown of what is available, along with charges from each provider. All providers that responded are featured in this table, including those that did not appear in Table 1 because they had not reported any business-level data.
The industry is broad and there are many different business models. Some providers charge initially and for each subsequent service required, while others have one all-in management fee that includes property transactions.
Several providers adopt a model in which they make no upfront charge – this is followed by Friends Life, IPM Trustees, Scottish Widows and Xafinity. All charge nothing at the outset but differ significantly in their approach to annual fees: Friends Life is on a time-cost basis; IPM Trustees charges a flat fee of £500 plus £170 per member and more if necessary on a time-cost basis; Scottish Widows charges a flat £940 per year; and Xafinity charges £650 for the first two members and £255 per member thereafter.
At the other end of the scale, some providers have a rather hefty set-up fee. The most expensive is the £2,500 charged by Wensley Mackay, although it points out that this cost includes property purchases and loanbacks within the first year. Depending on the intended uses of the SSAS, this could prove more economical than on first appearances. Mattioli Woods charges on a time-cost basis with a maximum of £2,500, which seems high but is at least capped. Several providers – namely Channack Consultancy, Lane Clark & Peacock and Michael J Field – all charge an initial fee on a time-cost or client-specific basis, giving no insight into how they compare to their peers.
One of the priciest options overall is from Nigel Sloam & Co. It charges £2,400 at the outset, plus £1,410 per year, and has one of the highest fees for loanbacks at £950 plus £150 per year. Partner Guy Young says this is due to it being an all-in cost, with consultancy and scheme administration included – services that may incur additional costs under other structures. He says this is the preferred model of the high-net-worth clients the firm caters for.
