LCP analysed data on DB schemes it administers to unravel the pension transfer market.
It found the biggest wealth manager player in the market was St James’s Place with 10% of the market and an average transfer size of £500,000.
While the report only covers a part of the market, it suggests SJP is one of the leading providers of pension transfers.
The second largest integrated adviser after SJP was Old Mutual Wealth (part of Quilter) which carried out about 6% of transfers and had an average transfer size of £320,000 per transfer.
Both firms saw a small fall in the volume of transfers between 2018 and 2019, said LCP.
The pension transfer market has recently come until intense scrutiny from regulators and some Financial Planners have pulled out of the market due to issues with regulation and Professional Indemnity insurance.
LCP’s research covered 1,250 transfers made during 2018 and 2019 from DB pension schemes with a value totalling £500m.
The study found that traditional insurers were the biggest recipients of transfers with 44% of transfers moved to them. Prudential and Royal London were the largest single beneficiaries but most transfers were at the smaller end of the transfer scale, with an average of just over £300,000.
Over a quarter of all transfers went to independent investment platforms and these tended to be larger transfers with an average of around £490,000 per member, said LCP. In many cases, those who transferred were managing their own investments via a SIPP.
Just under a quarter of all transfers went to integrated advisers (wealth management firms with a financial adviser arm), with an average transfer value of £410,000.
Other key findings were:
- The average transfer value was £380,000 and this was stable between 2018 and 2019.
- There were 15% fewer transfers in 2019 compared with the previous year, continuing a trend of gradual decline since DB transfers peaked in 2017.
- The three most successful firms in receiving transfers during 2018 and 2019 - each with around 10% of the market - were two large insurers, the Prudential and Royal London, and one vertically integrated adviser, St James’s Place.
- The insurance sector grew its market share from 41% to 48% between 2018 and 2019, while the proportion of transfers that went to firms providing an independent platform fell sharply from 31% to 23%.
- The two largest independent platform providers were AJ Bell and Transact (with around 6% and 4% of transfers respectively), but both saw a significant fall off in transfer volumes during the year.
- While independent platforms lost market share, they continued to receive the largest transfers, with the average received increasing by 10% from £475,000 in 2018 to £520,000 in 2019.
Clive Harrison, partner at LCP, said: “While DB transfer activity has declined since its peak in 2017, it remains several times higher than the level before the introduction of freedom and choice in 2015. Pension scheme trustees and sponsors can help their members make the right choice by giving them access to a financial adviser that has been selected by them to give unbiased and good quality expert advice. ”