View more on these topics

Profile: Clifton Asset Management on the ‘quiet crisis’ in Sipps

Clifton’s Adam Tavener on pension-led business funding and the crisis in the Sipp market

There is a “quiet crisis” going on in the self-invested personal pension market, according to Clifton Group’s chairman Adam Tavener.

Clifton specialises in providing services to SMEs through four business units – Sipp and small self-administered scheme subsidiary Morgan Lloyd; financial planning arm Clifton Wealth; Pension-Led Funding, which helps SMEs finance their businesses through their self-invested pensions; and Alternative Business Funding, a portal bringing alternative funders together under one roof. As a result, the Sipp market is one that Tavener knows well.

“A lot of long-standing Sipp managers have undisclosed amounts of ‘stinky stuff’ on their books: Ucis and the idiocy of a few years ago,” he says.

“They’re sitting on it either hoping it will go away or that they can manage the problem. But if all the pigeons come home to roost at once, there will be a bit of a scandal.”

Sipp provider denies unregulated introducer ties as court battle continues

Tavener says a lot of the problems stem from Sipp firms not being too worried about who their intermediaries were or what assets were on their books, because they had mistakenly believed they had no liabilities.

“It needs to wash through the system. It’s difficult to know the scale of it because it’s hidden on their books, but even though it’s a challenge, I don’t think it will be an industry killer,” he says.

Clifton’s Sipp business, Morgan Lloyd, has no exposure to assets like Ucis: “We saw that one coming and wouldn’t touch it with a barge-pole.”


1986-present: Clifton Asset Management, chairman

1983-1986: Falcon Group, co-founder and managing director

1981-1983: Porchester Group, unit manager

1979-1981: Berkeley Walbrook, sales consultant

1978: Youth Opportunities Programme, trainee estate agent

But Tavener says an unfortunate consequence of the publicity around “toxic assets” is that it has given non-standard assets in general a bad name.

“Non-standard assets have become tarnished by their association with quasi-criminal asset classes that are barely more than a rip-off,” he says.

“But non-standard asset classes can include commercial property or pension-led funding. These are great things to do and deliver great customer outcomes.”

FOS sees rise in new Sipp cases

Pension-led funding involves business owners taking a commercial loan from their SSAS or using their Sipp/SSAS money to buy intellectual property such as patents, trademarks and copyright, which are leased back to the business. With both options, businesses get the finance they need to expand.

Although Tavener created Pension-led in 2005, he had started tilting Clifton –  the IFA firm he created in 1986 – towards that market a decade earlier.

“I realised SMEs tended to have far greater focus on money to grow their business and had a fractious relationship with their pension pots; annoyed that they couldn’t use their pension money to make their businesses grow. We invented the concept of pension-led funding and brought it to industry recognition,” he says.

“We then moved away from the mainstream to go into the area of pension-led funding, which is difficult for many IFAs to do because it has so many moving parts to it.”

Pension-Led Funding is now central to Clifton and, as well as providing the main source of clients for Clifton Wealth, it has been rolled out to other advice firms too.

As you would expect, Tavener is a fan of pension freedoms as it gives people greater control over their money. He says he does not have much time for the “nannyish” attitudes.

In 2013, Tavener was invited by the Treasury to 10 Downing Street for the Innovators in Finance Summit’ and was instrumental in bringing about the Bank Referral Scheme, forcing banks to refer declined business loan applications to alternative funding providers.

Through that, the Alternative Business Funding part of Clifton was formed to help SMEs find options from a range of providers. It has been approved as a designated referral platform by the Treasury and the British Business Bank.

“It’s a natural extension of what we do. It may not seem an obvious one, but when your core business is small business owners it makes sense to have that on board,” says Tavener.

“Alternative Business Funding provides growth finance for hundreds of smaller businesses and some are appropriate for pension-led funding.”

Tavener is proud to be an innovator in an industry that is not always receptive to new ideas.

“As a business, we’re natural innovators and come up with what we think are clever solutions to the problems and needs of our customer base. But I’ve found it depressing from time to time that certain sections of our industry are resistant to change and innovation,” he says.

In the not-too-distant future, Tavener expects algorithms to take on some aspects of advice, but not everything.

“Technology is bound to make inroads into certain sectors – you don’t need 100 or 200 advisers to make binary or straightforward decisions. But the minute you get into anything complicated, people want to deal with people.”

Tavener sees many advice firms buying in or building systems that enable them to cater for clients who need less intervention, so they can service more than just the high net worth cases with complex needs who warrant more of their time.

Can artificial intelligence solve the DB transfer problem?

Tavener admits that the early part of his career was “not pretty”. As a teenager, he spent six months with an estate agent on a youth opportunities scheme but it did not work out.

“I didn’t wake up saying I want to be in financial services,” he says, but needing to earn a living, he then replied to a local newspaper ad placed by Berkeley Walbrook, a financial services group specialising in commission-based telesales of savings and insurance products.

Clifton is not Tavener’s first shot at starting a business. In 1983, he co-founded Falcon Group with some former colleagues. “I was 23 and to say I was an obnoxious little nerd is an understatement,” he says.

“I was not a team player at Falcon and this wasn’t a comfortable fit even though I was managing director. I announced I was setting up Clifton because I wanted to paddle my own canoe. Now, in my mid-50s, I’m not like that. I needed to learn from my own mistakes rather than collective decisions –  and I’ve learnt from them.”

Five questions

What’s the best bit of advice you’ve received in your career?

Be a force for good.

What keep you awake at night?

The thought of a Corbyn government. Putting dogma over outcomes is always a disaster.

What has had the most significant impact on financial advice in the last year?

It won’t be on many advisers’ radars, but the rise of peer-to-peer lending as an asset class.

If I was in charge of the FCA for a day I would…?

Lighten up on the good guys and come down harder and faster on the bad guys.

Any advice for new advisers?

Don’t be afraid to innovate – it’s how the industry learns.


David Moffat

The Big Interview: Platform tech boss: ‘Platforms have radically changed the industry but they haven’t made any money’

DST executive director David Moffat on more advisers becoming platform providers and why the industry is heading back to the future As a wave of platforms announce their intention to list publicly, many have speculated about the future shape of the market. The platforms listing have all sought to challenge conventional market models. Initial public […]

Richard Buxton: Three cheers for the return of volatility

A degree of fear and volatility is healthy, as investors have chance of picking up bargains. Market corrections are a healthy part of everyday investing. Make the most of the opportunities they provide. Spring is in the air. Wakened from their cosy lethargy of the long winter months, Mother Nature’s green shoots are starting to […]


News and expert analysis straight to your inbox

Sign up


There are 4 comments at the moment, we would love to hear your opinion too.

  1. It is ironic that there are two distinct camps in the Sipp market, those who recognise the liabilities arising from unregulated introducer’s with execution only deals and those who live in denial being obstructive with the truth

  2. “Pension-led funding involves business owners taking a commercial loan from their SSAS or using their Sipp/SSAS money to buy intellectual property such as patents, trademarks and copyright, which are leased back to the business.”

    So, when your business tanks, your pension’s worthless too.

    It’s always bothered me that this sort of advice seems to completely ignore concentration risk. We saw with all the uproar over banks’ SME lending that small businessmen are emotionally devoted to their life’s work beyond all economic reason, and this just seems to fuel that same drive.

    Surely, an adviser’s role is to give balanced, sensible and suitable advice – to be a critical friend, if you will – rather than simply to facilitate an all-eggs-in-one basket disaster waiting in the wings?

  3. Hi Adam, you make an extremely valid point regarding concentration risk. Hopefully you’ll appreciate that such issues are considered when delivering Pension Led Funding (PLF). There is a considerable amount of due diligence conducted before any transaction takes place & this is why only 17% of initial ‘applicants’ proceed to funding. It’s far from an ‘all eggs in a basket’ approach. Finally, any type of business funding needs to seen in the round. Realistically, post financial crisis, most traditional lenders (& most of the new kids on the block) require at least personal guarantees if not a more formal second charge on the family home. Should the business fail, then the potential loss of the family home is arguably even more catastrophic than the loss of a proportion of one’s pension – let’s face it – neither is particularly palatable. Basically, your point around giving balanced, sensible & suitable advice is the bottom line – and that’s why, if the cap fits, Pension Led Funding shouldn’t be dismissed out of hand as an option.

Leave a comment