Carey Pensions UK may be just 18 months old but it has come a long way since its formation in October 2009. Chief executive officer Christine Hallett says: “We went into profit in March, six months ahead of target. We have already passed the 1,000 Sipps barrier and we have 10 workplace pension schemes.”
Part of the Carey Group, an offshore trust administration group, Carey Pensions UK was founded when it saw the opportunity to move into administering pensions for the UK market.
Carey Group’s management team has played an important role in ensuring the smooth running of the company. Hallett says: “Commercial chief executive officer Tim Parkes plays a very active role.”
The Carey Pensions UK team is small, consisting of Hallett, service managers Sarah Halsey and Coral Hallett, head of service and operations Sheri Eggington and business support manager Carol Butler.
Hallett says: “We do Sipps, Ssas, workplace pensions, independent trusteeship and third-party administration as well as bespoke pensions. We are very big on property. We have a lot of commercial property syndicates where groups of Sipps come together to purchase a joint asset.”
Hallett: ’The key debate at the moment is about capital adequacy. The marketplace is very uneven in terms of who is deemed to hold money and who is not’
Hallett says the restricted investment Sipp is proving popular. She says: “People who do not want to go into the fuller investment options like alternative investments go for the restricted Sipp. It is a scheme bank account plus two other investment vehicles. Most simple Sipps only offer a scheme bank account or a scheme bank account plus one.
“We do not take interest rate terms on bank acc-ounts. Our scheme bank accounts are paying interest of 0.8 per cent, whereas most Sipp providers are either paying 0.25 per cent or nothing. We do this partly to satisfy TCF and also from an ethical point of view. Is it right to take some of the interest from the scheme bank accounts as income when rates are so low? I do not think so.”
Hallett intends to extend this client-focused agenda with two new products over the next year. She says: “We are building an electronic execution-only Sipp.
People will be able to apply online and have straight-through access to their funds. We get a lot of requests for execution-only Sipps and because we do not give advice, if we have a simple process where clients can do it for themselves, it is better for them.
“We are also considering a Nest equivalent by building a relationship with a low-cost model portfolio prov-ider. We are working closely with local companies, who want a simple solution to auto-enrolment at a low cost. We will be recruiting another four team members to help execute these plans by the end of the year.”
However, Hallett does think that the unbalanced nature of the Sipp market could be an issue. “The key debate at the moment is about capital adequacy,” she says. “The marketplace is very uneven in terms of who is deemed to hold money and who is not. The FSA may opt for an across-the-board approach and say, ’You all seem to operate in the same way and so you should all operate at this one level.’ Although this is less likely to affect us because we are deemed to hold money, it may affect smaller providers who have not been operating at a higher level.”
Carey Pensions UK is planning to offer flexible drawdown but is waiting until the fine print is finalised before proceeding.
Hallett says: “I think a lot of people will do it. At the end of the day, the whole concept of the Sipp was about flexibility, so it makes sense that that is followed through.”
The RDR will also alter the way Carey Pensions UK does business, according to Hallett. She says: “The advisers we deal with have made the transition and we are able to speak to them about the benefits of unbundled charging.
“I think it will signal a return to the old days when advisers priced each part of the solution accordingly. We are just bringing traditional values back into the framework and these changes will play to Carey Pensions UK’s skill set of transparency and relationship-building.”