In a statement on its website, the provider also confirmed it has already “downsized” its Gibraltar and Malta office, with further job cuts possible in the near future.
Speaking to International Adviser, Kentish confirmed that STM is “definitely interested in buying businesses.”
“Having trimmed unnecessary costs as a result of the UK budget in the new business teams in Gibraltar and Malta and with a healthy cash pile on the balance sheet, we are well placed to go on a buy and build acquisition spree in the now stagnant Qrops market,” he said.
The company also said that it has seen a drop-off of 80% in business going into its qualifying recognised overseas pension schemes (Qrops) following the Spring Budget in March, which saw the UK impose an unexpected 25% charge on overseas pension transfers outside the EEA.
“The expectation that the UK budget changes would impact 80% of new Qrops applications has proved accurate. The businesses in Gibraltar and Malta have therefore downsized their new business teams.
“Given the impact of the UK budget, the board continues to explore possible consolidation opportunities in the Qrops market, however this initiative remains at a very early stage of progress,” said STM.
New Sipp product
Following the Budget, the pension provider said it immediately launched an international Sipp via its UK business, which STM bought from London & Colonial last September.
The international Sipp is promoted as a replacement for STM’s Gibraltar or Malta-based Qrops and since its launch had seen “considerable interest” from financial advisers resulting in a “significant uplift in business for the UK operation”.
Further job cuts
Despite seeing “reasonable uptake” of the international Sipp, STM said it was prepared to “reduce costs in the business development area” should the product fail to “gain traction” in certain jurisdictions.
“It is too early to say with any degree of certainty the extent to which the international Sipp offering will replace the foregone Qrop applications.
“However, the Group has seen a reasonable uptake of international Sipp applications already and growing interest, hence expects a proportion of the foregone Qrops revenue will be clawed back, albeit at slightly lower margins.
“Whilst management is hopeful of increasing revenue from new business applications for its international Sipp, it remains able to further reduce costs in the business development area should the nternational Sipp not gain traction in certain geographical areas,” said STM.
New Australia Qrops
STM added that it was working on the “imminent launch” of the Group’s new Qrop solution for UK expats living in Australia.
The firm, which has operations in Malta and Gibraltar, Spain, and Jersey, already has a Gibraltar-based Australian superannuation scheme, which it launched last October.
Last month, IVCM’s Cameron Law said Australia and New Zealand are still are “huge opportunity” for Qrop providers as British expats retiring there can still transfer their UK pensions overseas without incurring the UK’s 25% tax charge.