SIPP, Hargreaves Lansdown and Funds

EdInvestor

Hello McGhie

If you give us an idea of what you plan to invest the money in, then it will be easier to see which is the best SIPP.

McGhie

Hi Ed

For the forseeable future I would be investing in managed funds. I'm looking for a fund supermarket level of variety (not satisfied, for instance, with the selection of external funds available to me in my CM PPP). Happy, from what I've seen, in the FNW, HL and Selestia selections. Happy also to consider alternatives providers with similar offerings (both SIPPs and non-SIPPs).

Having made my last post, I've spotted the information on the HL site that let's you know which funds attract the additional 0.5% annual charge (the funds with an asterisk in the annual charge column). It seems to be a very small proportion (e.g. only one of the Wealth 150) and therefore the HL SIPP looks more attractive than I thought yesterday. Does the HL SIPP (or Selestia) charge for transfers between funds? Fidelity doesn't. If HL does not charge for transfers and one only invests in funds that do pay trail then I think that HL will be hard to beat on costs (the only charge would seem then to be heavily discounted initial charges). Does anyone know of a cheaper provider of such pensions or have any contradictions to what I've written? It's hard to know if the Selestia route could/would be cheaper. Of course, it would accept the protected rights, which it's not clear yet that SIPPs will.

Cheers
Ian

dunstonh

Does the HL SIPP (or Selestia) charge for transfers between funds?

Selestia do not and I dont believe HL do. Fidelity charge 0.25% on ISAs and Unit Trusts so I assume that is the same on SIPPs as well. The charge is at fund level though and not contract level.

It's hard to know if the Selestia route could/would be cheaper. Of course, it would accept the protected rights, which it's not clear yet that SIPPs will.

If you go execution only through a discount IFA then you can get Selestia cheaper on the annual management. However, they are more expensive on the initial charge at 1.2%. However, the annual managment charge discount could offset that initial charge in a few years. A £100k fund with the providing company taking 0.1% trail instead of the 0.5% trail means you only need 3 years to cover that option.

The Selestia option is not direct to public though and requires an FSA authorised firm to deal with it (in other words an IFA). If you dont mind that, then Selestia can be the cheapest option. If you want the functionality of HL, then you probably cannot beat them.

EdInvestor

H-L are almost certain to be the best bet for unit trusts, but if you think you might want to use investment trusts or shares at some point (much lower charges) then it might be worth looking at https://www.sippdeal.co.uk and https://www.alliancetrust.co.uk

moneyandmountains

dunstonh wrote:

If you go execution only through a discount IFA then you can get Selestia cheaper on the annual management.

Though is Selestia available through any discount IFA?

dunstonh wrote:

The Selestia option is not direct to public though and requires an FSA authorised firm to deal with it (in other words an IFA).

I notice that Selestia say the following:
"In the future the Intermediary may request that Selestia provide a Client of the Intermediary with a password and User ID to enable such Client to access the Website and System to view information about the Products held by such Client. Selestia reserves the right to refuse such request. The access rights granted to any Client will be Limited Access Rights only to their data."

Does this mean that Clients can have access to their accounts with Selestia and manage their own investments, after initial setup by an IFA?


Happy New Year

dunstonh

Though is Selestia available through any discount IFA?

Its upto the IFA if they offer it on discount terms. I seem to recall someone saying Cavendish wont offer it (they seem to prefer traditional insurance companies). Selestia's pension was the first of the new generation pensions offered post A day. Like anything new, it can take some companies/advisers time for them to appear on the radar.

I notice that Selestia say the following:
"In the future the Intermediary may request that Selestia provide a Client of the Intermediary with a password and User ID to enable such Client to access the Website and System to view information about the Products held by such Client. Selestia reserves the right to refuse such request. The access rights granted to any Client will be Limited Access Rights only to their data."

Does this mean that Clients can have access to their accounts with Selestia and manage their own investments, after initial setup by an IFA?

It's coming but its not available yet. It will apparantly have the features that on the Skandia platform (which are very good). The ETA is around 12-18 months for the platforms to merge although the availability of the tools and web access may occur before then.

moneyandmountains

EdInvestor wrote:

H-L are almost certain to be the best bet for unit trusts

Are you sure about this?
Whilst TER etc. would seem to point this way, the reduction in yield figures given on the H&L web page certainly don't seem to suggest this.

EdInvestor

HL's Sipp fees are listed here.

Perhaps you should clarify the RIY issue with them.It's unclear what the figure is based on. RIYs are not normally used with Sipps where fees are transparent and based on flat rates, for obvious reasons.

moneyandmountains

EdInvestor wrote:

Perhaps you should clarify the RIY issue with them.It's unclear what the figure is based on. RIYs are not normally used with Sipps where fees are transparent and based on flat rates, for obvious reasons.

Ok Ed Investor

Perhaps I was a bit hasty, but I don't like it when the charge don't add up. As they say better to be safe than sorry.

So as posted in the Charges/TER thread, the response from H&L
"The reduction in yield figures that you see in the key features are provided by the groups and as well as the annual charges, they take account of the initial charge that is applicable to purchase of the fund. However the figures do not take into account any saving on the initial charge provided by a financial intermediary such as ourselves.

What you are seeing in the reduction in yield figures for the Artemis European Growth therefore is the effect of the annual Total Expense Ratio of 1.54% and a full Initial Charge of 5.25% being applied to the purchase. No account is taken of the 5% saving on this charge that we offer. We hope soon to be producing reduction in yield figures that do take account of our savings on the initial charge, however these are not presently available."

So better than I thought, but meaning the RIY figures are useless.

EdInvestor

Thanks for checking that mandm

Perhaps it will alert them to remove the figure from their site as it's obviously misleading.