SIPP, Hargreaves Lansdown and Funds

EdInvestor

AFAIK Sipps don't provide RIY figures,because their charges are transparent.

Of course the hidden charges in funds are not counted either way and will often be more than 1%.

jamesd

HL recently sent out a flyer promoting the Jupiter Corporate Bond and Invesco Perpetual Income funds. They gave these reduction in yield figures:

Jupiter Corporate bond: RIY 3.3% from 6% TER 1.29% AMC 1%
Invesco Perpetual Income: RIY 3.7% from 6% TER 1.68% AMC 1.5%

They also gave a note that the effect of deductions figure for the Jupiter Corporate Bond fund assumes a growth rate of 5.25%.

dunstonh

AFAIK Sipps don't provide RIY figures,because their charges are transparent.

How are SIPP charges more transparent than mono charged personal pensions? Especially from those where the TER=AMC.

SIPPs are multi charge contracts and its more important to have an RIY comparison with multi charge plans than a mono charged pension which is much easier to work out without the need for an illustration.

EdInvestor

With a SIPP each charge is listed,transaction charges, initial charges, annual fees and other charges etc.So you can work out the effect on your returns directly.With an ordinary pension the components are not costed separately, hence the RIY can be useful.

As mentioned before with funds there re many hidden charges which will not be costed out by either regime.

MiM

Question for EdInvestor (or anyone else who wants to help!): You've helped me before on an issue regarding my pension and I wasn't sure whether to put this question on this thread, that one, or whether it would be cheeky to pm you.

Basically, I have a complicated pension situ, with small amounts with Standard Life, Equitable Life and a new contributory pension at work.

I've now decided that I would like a SIPP if possible because I think it's a good time to invest in some good stocks while the prices are low.

I already have decent savings elsewhere so I feel I can afford to take some risks.

I want to choose my own stocks, possbly combined with some funds.

Can I use the money in my Standard Life pension for this purpose?

If so, where do you suggest would be best to do it? Hargreaves Landsdown? Is the Standard Life SIPP worth considering?

EdInvestor

MiM wrote: »

I want to choose my own stocks, possbly combined with some funds.

Can I use the money in my Standard Life pension for this purpose?

Yes

If so, where do you suggest would be best to do it? Hargreaves Landsdown? Is the Standard Life SIPP worth considering?

If you are talking mainly shares with a few funds, I would suggest https://www.sippdeal.co.uk, this will be the cheapest and the service is top-notch.

The Std Life SIPP is too expensive and the HL one is not a very good deal for shares.

MiM

Fantastic Ed, many thanks.

DUS

EdInvestor wrote: »

Yes



If you are talking mainly shares with a few funds, I would suggest www.sippdeal.co.uk, this will be the cheapest and the service is top-notch.

The Std Life SIPP is too expensive and the HL one is not a very good deal for shares.

Is HL really so much worse for shares?

Asssuming you buy shares once per quarter and purchase 2 funds a year on sippdeal, depending on the size of the trade in the shares (let´s assume GBP 1500 per quarter), after 12 months you would have paid GBP 59.80 for the shares and GBP 40 for the 2 funds, or a total of 99.80. With HL you would only pay 59.80 as the fund dealing is free.

And if you are lucky enough to do 1 trade a month being worth 15,000, then HL would be almost 60 quid cheaper (299.40 @ HL versus 360 @ Se). Sure, I can construct cases where HL might end up being the more expensive option, but I still fail to see the reason why everyone seems to say that HL is regularly only second best when it comes to trading shares within your SIPP?

It´s the generalisation of this claim that really suprises me. Having said that, I might overlook substantial errors in my "calculation" so I stand to be corrected and hope you can shed some light on my "disbelief" in the anti HL comments.

Cheers,
DUS

EdInvestor

DUS wrote: »

I still fail to see the reason why everyone seems to say that HL is regularly only second best when it comes to trading shares within your SIPP?

I'm not an HL customer but I have heard that it's dealing arrangments are not great for shares - it specialises in funds, not shares.In addition IIRC they will charge an annual fee as well as transaction costs if you are buying shares.

For people who are regularly trading shares, it will be better to choose Sippdealextra, which features a list of outside brokers with lower dealing charges than Sippdeal.Sippdealextra charges an annual fee but it will still work out cheaper for regular traders.

DUS

EdInvestor wrote: »

Sippdealextra charges an annual fee but it will still work out cheaper for regular traders.

No need for a proper calculation, but if you say "regular traders" you´re rougly talking about how many trades a year?

DUS