After consulting on pensions for nine years, Regnart was commissioned by James Hay in 1995 to research and assess the potential of the Sipp market. In January 1996, she launched the James Hay Sipp, which she designed from scratch on her dining room table. She says that the Government was starting to encourage people to take control of their retirement savings.
“The Sipp market had not developed at that stage. Intermediaries and life offices were very much focused on insured pensions and occupational schemes were the biggest concept in pensions but employers were finding those more difficult to fund. It was really putting together income drawdown and the self-invested concept that captured peoples imaginations because it gave them more control over their investments.”
She says life companies, which were relatively inexperienced in the area, embraced Sipps early on which helped move the market forward.
“We went to all the insurance companies to talk to them about self-invested pensions. A lot of them white-labelled our product and therefore acted as a distribution channel for us. In that way, the insurance companies learned about the Sipp market and the market developed and grew.”
Initially, only high-net-worth, investmentsavvy clients used Sipps as retirement savings vehicles but the product has become more mainstream as the market has grown.
“In 1995, it was basically high-net-worth, financially astute individuals buying Sipps. Intermediaries were very much tied to the insurance company market and were receiving remuneration from those companies but the top-end intermediaries, who wanted to be more fee-based, helped the concept along. It was a very niche market then and it grew over the years. It was a combination of everything, the investment market, the environment, the economy, that moved it to the front of the market and made it more of a mainstream provision.”
She does not believe that Sipps will become liable to misselling claims, as some in the industry have predicted. She says clients, who may well not use a Sipp to its full potential, should be able to find one which is priced as competitively as a stakeholder pension.
“You could simply put cash in a Sipp, that would not be a particularly good strategy if you want diversification of your investments, but you could put a very simple structure within your Sipp and some providers are charging reasonable amounts, less than stakeholder vehicles.” She predicts the market will continue to expand as long as it remains a tax-efficient provision.
Sipps are not Regnart’s only area of specialism. In 2002, she established an institutional and retail fund supermarket and achieved FSA authorisation for Abbey Wrap Managers , now known as James Hay Wrap Managers, because she strongly believes wrap platforms are the way for the future.
“Why have just a Sipp concept? You may as well extend it to wraps because then you have the all-encompassing private client service to give to the intermediaries and the sophisticated end of the market.
“The reason that intermediaries want to be in the wrap market is because they want to save on back-office costs. Basically, it is easier for them, than dealing with a multiplicity of providers, to have it all on a portal they can view and should save them an awful lot of money.
“From a consumer’s perspective, it should mean that the intermediary has more time to work out their investment strategy and build the relationship. It makes clients feel more confident about the institutions looking after their money because they can actually see it, it is all on one page. Visibility is very important when you want to trust people.”
But she predicts that only half a dozen providers will still be players in the wrap market in five years time. She says wraps are very expensive to dabble in and the senior management at the many companies which have thrown money at them will soon want to see profits.
“The cost of building a platform and setting up an operation efficiently are quite enormous because you really need to have an awful lot of knowledge at your fingertips and experience to be able to set it up properly.”
She says the problem that providers are encountering in the market at the moment is that they are spending so much effort on developing their systems but they will have a very long learning curve before they get to their ideal model. As they are having to compete with each other, their charges are not particularly high compared with the amount of effort having to be put in.
“There may be people that will want to outsource various administrative functions to save costs but many will fall by the wayside. There will be probably half a dozen wrap providers, maybe not that many, surviving in five years time. The senior management will question how much money is going into platforms and they will want returns on these operations. It will be interesting to see how many actually manage to make ends meet.”
In January, Regnart left James Hay to set up Wealthime, her own Sipp and wrap consultancy and the company is going strong and she is excited over what the future holds.
Born: February 1955, Blackpool
Lives: Downton, Salisbury, Wiltshire
Career: January 2007 – present: managing director, Wealthtime; 2003-2007: chief executive officer, Abbey Wrap Managers; 1996-2007: managing director, James Hay; 1987-96: self-employed pension consultant; 1979-87: GP Turner L&P; 1973-79: Guardian Royal Exchange Assurance
Likes: Blackcurrant jam
Dislikes: Inefficient technology
Favourite film: Fifth Element
Favourite books/play: A Brief History of Time, Lord of the Rings, A Midsummer Night’s Dream
Favourite band: Muse
Hero: Martin Luther King
Career ambition: To help people take control of their wealth
Best piece of advice I’ve received: Imagine the impossible and set about achieving it and the second best, Never step in puddles because you don’t know how deep they are.
If I wasn’t doing this I would be… A cosmologist or an astronaut