The pensions industry is predicting the new authorisations regime for master trusts will cause a number of providers to either close or be acquired.
While all of the providers polled by the Pensions Management Institute welcomed authorisation as a “good thing”, 87 per cent said it would accelerate consolidation.
Around 60 per cent said they expected there to be fewer than 20 master trusts in five years, down from 87 that had defined contribution members registered with The Pensions Regulator in 2016/17.
30 providers have already said they will not go through the authorisations process, according to TPR.
While 93 per cent “strongly agreed” with the authorisations regime in general, a quarter said they would prefer a more principles-based approach, rather than one that drills down into details.
More than half of providers said collaboration on innovations such as pension dashboards would help drive master trusts to adopt new technology.
PMI president Lesley Carline says: “Our report has shown that the growing master trust sector must overcome significant obstacles if it wants to offer good service delivery for members. However, the figures also indicate that much of the industry, including some major players in the master trust sector, are largely aligned and eager to work together to help tackle industry issues.
“In fact, a collaborative approach appears to be a ‘no brainer’, as the majority of the firms we surveyed would support further joint efforts to tackle the barriers to good service delivery and positive member outcomes.”