On the go: Punter Southall Aspire has withdrawn its master trust from the market, merging with Evolve Pensions after concluding that it was unlikely to reach the necessary scale.
Trustees of the Aspire Savings Trust are now reviewing potential new homes for the multi-employer scheme’s members and assets.
The move will bring the total number of authorised master trusts down to 37, from an estimated peak of more than 100 several years ago. Increased demands from the Pensions Regulator and competition for new assets has led the market to shrink.
A strategic review led the consultancy and financial advice company to conclude that “the business landscape has changed and that opportunities to scale have reduced”, and instead it has decided to focus on its retirement and financial planning business.
Alongside the withdrawal, Punter Southall Aspire announced a strategic partnership with Evolve Pensions, providing at-retirement advice to members of its 1,500-employer Crystal trust.
Steve Butler, chief Executive of Punter Southall Aspire, said: “There are many synergies between Punter Southall Aspire and Evolve.
“Our new strategic partnership will enable us to focus on our strengths – providing financial advice and consultancy to support members’ financial planning, and helping them make the best financial retirement decisions.”
Experts are now watching for further consolidation in the master trust market, with the completion of auto-enrolment’s rollout meaning the amount of new business coming to market is relatively limited.
Some providers have focused on converting large blue-chip businesses that had previously run their own trusts, while others have focused on providing an off-the-shelf solution to small and medium-sized enterprises, and there have been several instances of master trust mergers.
Sharon Bellingham, senior consultant at Hymans Robertson, said: “Further consolidation has always been expected in the post-authorisation world and, with that in mind, today’s announcement that Punter Southall Aspire has decided to leave the market is not unexpected.
“Achieving scale is essential in today’s challenging market and it’s clear that some will struggle, with commercials likely to be impacted by the recent and substantial falls that we’ve seen, as will the reduction of monies-in as furloughing bites and employers attempt to navigate their way through Covid-19.”
She added: “Thinking about the pace of consolidation, what’s clear is that it will be more vigorous than we anticipated a few months ago.”
