HSBC has abandoned plans to enter the master trust market, four years after it became the first provider to receive authorisation from TPR.
Despite announcing ambition plans to be a top five player within five years, the trust has now closed without accepting any external clients at all.
HSBC received authorisation in 2019, with plans to be accept its first client in 2021. According to reports the master trust was still recruiting for its master trust business in September last year.
However in a statement given to the FT the bank said: “Following an extensive review this strategic direction has been been taken to reallocate resources towards other priorities.” It did not disclose how much had been spend developing this proposition, which it was using for its own employee DC pensions.
Advisers in the sector have speculated that HSBC was too late entering the market, which has already seen considerable consolidation. Earlier this year it was announced that Cushon, one of the fastest-growing new entrants in this sector, was being acquired by NatWest.
The UK’s workplace market is already a multi-billion market and is growing fast thanks to auto-enrolment which has brought in around 10m savers into this pension sector in recent years. Minimum contribution levels are expected to increase in the next few years.
HSBC has recently come under pressure from some shareholders to reduce its high cost base.