Martin Tilley

Martin Tilley
Chief Operating Officer

In his latest article for Sipps Professional, WBR SSAS and SIPP expert Martin Tilley looks at why SSASs are so unloved by some advisers. 

Scrolling through my Twitter feed recently I came across a trail relating to financial advisers recommending Small Self-Administered Schemes (SSASs).

I was taken aback by the negativity of some comments made by advisers, relating to the history of SSASs and how several would never recommend their use.

Further comments in the thread cited that SIPPs afforded more control than SSASs and were more often than not cheaper to run. This may well be true where the full features of SSAS are not being used but show me a case where it is less expensive for four individual syndicated SIPPs to acquire a property with borrowing than through a SSAS.

I would also argue against the control issue too, since a SSAS is totally controlled by its trustees (members) without an FCA regulated third party provider imposing their own controls over their own product.

I have heard some cynics suggest that SSASs are not recommended by advisers since as they cannot control the investment of assets, there have a limited ongoing role and there is therefore limited remuneration to be had. This may have been the case years many years ago, but it is not a view that I currently subscribe to. Certainly, from those advisers that do advise on the use of SSASs, they recognise that a SSAS is just one element of any overall wealth and planning strategy.

Some advisers simply do not understand the features of a SSAS and the benefits they might offer to their clients.

From my own (albeit historic) experience, the education material provided by both the Pensions Management Institute and Chartered Insurance Institute relating to SSASs, is quite limited. I have presented to the adviser and Paraplanner community on numerous occasions over the years and I have always felt the session well received and thought provoking. Perhaps more in-depth educational opportunities would be welcomed.

I will concede that a SSAS is not a mainstream pension vehicle. Being an occupational arrangement, it can only serve a purpose where there is an employer, so it may only be relevant where the client is either the employer itself or perhaps employed directors or senior employees.

A SSAS should be considered not just at the time of the advice being made, but whether at some point in the future, its unique features may be of interest and use.

SSASs come into their own where there are multiple members, or where the ownership of commercial property would benefit the business. There is a useful loan back facility (anyone remember the problems caused by Covid in 2020?) and the opportunity to cascade wealth down through generations, using a single trust, which is particularly useful in a family run business.

The SSAS market has done well to shake off its tarnished reputation firstly brought about by the misuse of some miscreants who suggested it was a pension liberation vehicle and secondly by scammers, using it as a recipient for toxic investment ideas that were being refused by SIPPs.

Thankfully, legislation was changed to introduce wider requirements and responsibilities of the Scheme Administrator and HMRC’s check and register process shut down the process for registering inappropriate schemes. The Transfer Regulations from November of last year have also restricted transfers to SSASs to only those that can demonstrate their legitimacy.

SSASs deserve a second look.