Low Cost Sipp

Wivelrod

Am I right in thinking that if one wanted to set up a low cost SIPP with the intention of buying large amounts of ETFs on a monthly basis it would probably be best to use SippdealExtra for the SIPP wrapper and SelfTrade for the trades?

It seemed to me that the overall cost (annual SIPP charge with SippdealExtra and the dealing costs with SelfTrade) would be cheaper than the offering from HL (or anything else I can see).

Any comments on the level of service from SippdealExtra (I saw Alliance Trust had to close their SIPP to new applicants late last year and there seemed to be concerns with the level of service provided - any concerns with SippdealExtra)?

Many thanks

EdInvestor

Wivelrod wrote: »

Am I right in thinking that if one wanted to set up a low cost SIPP with the intention of buying large amounts of ETFs on a monthly basis it would probably be best to use SippdealExtra for the SIPP wrapper and SelfTrade for the trades?It seemed to me that the overall cost (annual SIPP charge with SippdealExtra and the dealing costs with SelfTrade) would be cheaper than the offering from HL (or anything else I can see).

What size of trades? Sippdeal ordinaire might be cheaper. I'm assuming that neither provider offers free investment on a monthly basis for ETFs as H-L does for unit trusts.

Any comments on the level of service from SippdealExtra

I've heard no complaints about Sippdeal but there has been some trouble at Selftrade in the past year with problems at their new site and some complaints about poor customer service. I haven't personally had a problem though.

Wivelrod

Thanks Ed Investor.

Having ignored my pension for the past 25 years, I now have a large lump sum which I want to put into a SIPP before the end of this tax year. Once it is in I want to spread it between 22 different ETFs. If I invest all the money on day one the dealing charges are around £553 (with HL). However, I would prefer to invest the contribution on a monthly basis (I heard that this would be better - pound cost averaging or something). But when I do this I need to carry out 264 trades (12 X 22) and the dealing costs rise to £3,521 (again with HL).

The quandry, therefore, is should I save £3k on dealing charges and take my chances with pound cost averaging or spend the extra 3K and spread the deals over 12 months?

I guess there is a compromise which is to invest quarterly, but this still runs up dealing costs of £1,750.

What would you do?

Thanks for your advice.

Regards

EdInvestor

Wivelrod wrote: »

The quandry, therefore, is should I save £3k on dealing charges

That's a quandary?

Pound costs averaging is more of a marketing ploy in volatile times than an actual strategy. If you are looking long term and have a reasonable risk profile I would save the money.

EdInvestor

Just found this, should solve the problem admirably

http://www.selftrade.co.uk/services/other/regular-investments.php

Wivelrod

:j You've solved the problem and saved me a small fortune! Many thanks!:beer: