Manchester-based Liberty SIPP revealed it had reversed back-to-back years of small losses to grow revenue by two fifths and achieve a profit margin of 20% last year.
Glasgow-based @SIPP announced a near four-fold increase in profit before tax for the year ending 31 March 2017 – rising from £70,000 to £250,000. Total sales increased by one third, while new customer numbers grew by 28%.
Colin Barral, chairman of @SIPP, said it has had several takeover approaches from “other market players” but stressed “we remain committed to our strategy of organic growth supplemented by possible tactical acquisitions which we continue to monitor."
Liberty SIPP, which this summer celebrates its 10th anniversary, has published results showing it made a pre-tax profit of £420,000 in the year to April. Its revenue grew to £2.1m – the highest in the firm’s history and a 39% increase on the year before.
The business said it had spent two years investing in technology and people, enabling it to handle much greater numbers of clients. In 2017 it is set to increase its admin staff by 30%.
The firm blamed this investment for losses of £60,000 in the year to 2015 and £80,000 the following year.
In the last tax year, however, it grew client numbers by 44% and nearly doubled its assets under administration. It currently administers £1.64bn of client assets.
The growth follows a “strategic change of direction” as Liberty moved from a premium, bespoke pension firm to a fixed-fee, pared back SIPP provider.
John Fox, managing director of Liberty SIPP, said:
“The SIPP market has been transformed in recent years, and we have adapted with it. Not so long ago many advisers we spoke would tell us ‘we don’t do SIPPs’.
“Now SIPPs have become a much more mainstream product, which for some clients will be cheaper than a standard personal pension. SIPPs are now an essential part of every adviser’s toolkit.
For the year ending 31 March, total revenues for @SIPP were £2.7million compared to
£2.1million in March 2016. It acquired Essex- based SSAS firm Alfa Trustees in June 2016, to give it “an enhanced presence and proven expertise in the UK SSAS market”. The firm reported that SSAS accounted for 10% of its overall revenue.
Eddie McGuire, @SIPP managing director, said: "The substantial increase in our profits demonstrates the strength and scale that we have built in recent years and we are confident this growth will continue. Our business is well capitalised and will, we believe, be one of a small number of profitable full SIPP providers in the UK market in the future.
“With robust revenues and lapse rates significantly below the industry average, we are well positioned to capitalise on the continued growth in today's SIPP market fuelled by legacy Defined Contribution and Defined Benefit transfers and the broader pensions' freedoms regime."