Set up fee 100
Transfer in fee 85
Dealing costs for 15 shares 225
Stamp duty 150
Dealing costs for 2 trusts 30
Stamp duty 20
Sub total 610
which is 1.4%, lower than the 1.5% cost of stakeholder.
With the SIPP, the bigger your fund gets, the lower the charges, with a percentage charged pension, it's the opposite
This one is for the cautious investor, so the asset allocation is much like it is for an investment bond,
You havent quoted the annual management charges on the funds you will selected on the SIPP. You keep focusing on the wrapper and you have a cheap wrapper. What are the annual management charges on those funds?
Not sure what funds you are talking about.Using SIPPs enables you to avoid funds, which are riven with high charges.
BTW Dunstonh, you haven't mentioned the "hidden charges" in pension funds and unit trusts - the ones the FSA doesn't require the providers to disclose, on top of the AMC. They show up in the "Total Expense Ratio". Usually add between 0.5% and 1% to the total costs. Some IFAs I've met genuinely don't know about these charges, because they're kept prtty quiet - so I won't complain if you're one of them.Basically they are the dealing costs/stamp duty etc charges,plus "soft commissions" and such, which are transparent in the SIPP but not in funds.
The charges total is creeping up quite seriously now with the new 1.5% stakeholder cap: IMHO they are really unaffordable these days when we can only expect low returns, due to low inflation and low interest rates.
Here you are not comparing like for like. You are discussing holding single shares and not funds.
At low levels of investment they are expensive. There are numerous posts site saying they are cheap however nearly every post ignores the fact the SIPP is just a wrapper and there are ongoing costs on what you hold in it
I would disagree with on the tracker front as that would be cheaper inside a stakeholder.
The issue we are really trying to get ed to see is:
1 - SIPPs are for more confident investors
2 - Are not always cheaper than the alternatives available
3 - He should include fund management charges on SIPPs when comparing against alternatives. i.e. mentioning the 1% on SHPs but saying funds in SIPPs have no AMCs.
I was showing my small SIPP is perfectly cost-effective.You and whiteflag both make the mistake of assuming that people who advocate investing within a SIPP wrapper are suggesting that one holds funds. This is incorrect. Vocal SIPP fans generally hold their own portfolios of individual shares, IME.
1 - It isn't so much confidence as correct information that investors require.
2 - I don't have enough information to argue that one, though I have yet to see a situation where a transaction which involves an intermediary is cheaper than one which doesn't...
3 - I don't think that Ed said that funds in SIPPs have no AMC; you are once again assuming that everyone holds funds.
I'd have thought the majority of SIPP investors would be doing the exact opposite. A major point of SIPPs is that you can invest in the underlying assets (shares, property,bonds,cash) without paying extra for all the expensive and elaborate ( not to mention confusing) packaging that goes with the funds.
If you want to invest in funds (which most people do)....
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