The founder of a SIPP firm has predicted ‘casualties’ within the Sipps market in coming months.

Brian Talbot, founder shareholder and director, Talbot and Muir, said this would be caused by ‘toxic’ assets within Sipp plans causing problems.

Mr Talbot made the prediction today as his firm announced a 14% increase in new SIPPs set up during 2017 (4,360) compared to 2016 (3,820).

He said: “The tectonic plates within the SIPP industry have been moving rapidly over the last few years as providers reacted to the increased burden of capital adequacy and spectre of increased FCA scrutiny, combined with failing, non-standard investments.

“We believe there will be further consolidation and casualties within the market, driven in no small part by the extent of some providers’ exposure to toxic, non-standard assets.”

He said: “We have watched from afar over the last 10 years, with some degree of envy, the rapid growth of some of our competitors. We are now seeing that, in some cases, this growth was driven by an open-door policy where all manner of investments were allowed, often introduced via a combination of non-regulated introducers and direct clients.

“Where due diligence on these investments and introducers was lacking, the consequences are starting to be felt by these firms.”

He cited the SFO enquiry into Ethical Forestry and the high profile collapse of Elysian Fuels as two examples affecting some of the large players in the market.

He said: “Added to HMRC penalties, legal costs, and reputational damage this will have a serious impact on those firms exposed to such investments.”

Talbot and Muir also reported today:

- It has sights on new premises as it reaches its 25th year
- A 14% increase in new SIPP schemes in 2017
- Total SSAS and SIPP numbers rising 12% to 5070 last year
- AUM up over 30% to £2.4bn
- 40% increase in supporting introducers