Chosing a SIPP provider

gataylor

I really thought I knew what I wanted to ask. Then I started reading this forum and it all got murky...!

I have a (personal?) pension with Scottish Widows. I'd like to move it to (I think) a full SIPP. My reasons are:

• I will want to invest in some specific shares, rather than funds,
• I'm a reasonably confident share-picker,
• I'm turning into a control freak, and want more control over what is invested where.

I don't think a hybrid SIPP allows shares, and the flexibility to have specific shares in the pension is quite important to me.

So, I'm looking for a good value provider for this. They should have a good range of funds on offer, as well as a good range of shares. And since I'm a geek it should (ideally) all be controllable online, and an intuitive interface with lots of features would be a good plus.

The MSE article on pensions says "watch for a new article on the cheapest Sipps soon", but it has been saying that for a few weeks now and I'm getting impatient.

I already have an ISA with SquareGain, and I'm happy with their wide selection of possible shares for the ISA (I moved there because I wasn't happy with the choices from Schwab/Barclays). The interface isn't bad either, and it might be nice keeping everything under one login.

A number of folks talk about Hargeaves Lansdown - can anyone compare their selection of funds and shares with SquareGain's? What's the interface like (I've heard the portfolio management isn't as slick as SquareGain's)?

Does anyone have any other criteria I should be comparing them on? Anything else I should know? Any other providers I should consider?

And finally, what's the deal with the whole 'trustee' thing? This was completely new to me after reading this forum, and I'm not sure I've really grasped it. SquareGain allowed you to choose either EPML or SIPPdeal (is this information still current), but how does that tie in with SIPPdealextra. Or are they completely different things? And can I ignore it completely and hope it goes away?

Many thanks,

Geoff

dunstonh

I don't think a hybrid SIPP allows shares, and the flexibility to have specific shares in the pension is quite important to me.

You are correct. Hybrids are designed for those wanting direct investment into unit trust/oeic funds but not shares or other investment types. Most SIPPs go into funds still and the hybrid SIPPs are very good value in those cases (indeed, they can beat HL's pricing on the full SIPP) but a hybrid wouldnt match your requirements.

I tend to only deal with IFA "advice" based SIPPs so my clients have a different requirement to you and most go with the hybrid SIPP. So I will let the others here that have their own full SIPPs offer their views on what they have as they would almost certainly be more suitable than those that I would use for clients expecting me to do the work and not them. I wouldnt be surprised if HL come out as best full SIPP though.

EdInvestor

gataylor wrote:

I have a (personal?) pension with Scottish Widows. I'd like to move it to (I think) a full SIPP.

What you want it seems is a low cost online SIPP.A full SIPP is different again,these are the expensive one which enable you to buy commercial property (as in your own office block).

So, I'm looking for a good value provider for this. They should have a good range of funds on offer, as well as a good range of shares. And since I'm a geek it should (ideally) all be controllable online, and an intuitive interface with lots of features would be a good plus.

There are really three main choices: Sippdeal/Sippdealextra, Alliance Trust and Hargreaves Lansdown, with EPML having a small niche in that it allows protected rights money, but only invested in cash at present.

A number of folks talk about Hargeaves Lansdown - can anyone compare their selection of funds and shares with SquareGain's? What's the interface like (I've heard the portfolio management isn't as slick as SquareGain's)?

Reports suggest HL are probably the cheapest for funds (check the dealing charges) but they are more expensive for shares and reportedly not very good at the admin.

Sippdeal confines you to James Brearley as the broker but there's no annual fee and the admin is good on both the broking and trustee side for both funds and shares.Sippdealextra gives you your own broker, but you pay an annual fee. If you plan to trade a lot, use the latter, if not the former is cheaper and quite OK.Alliance Trust offers very low cost mass dealing charges and is good for regular saving type investment and also investment trusts.

And finally, what's the deal with the whole 'trustee' thing?

Sippdeal is the market leader on the trustee side in the non-insurance co sector of the market (James Hay was the main provider in the past and may still attract people who have traditional lifeco-based funds and want something different from HL). Speaking personally Sippdeal's service has been excellent, a major contrast to the sort of hassle you have to go through with most insurance companies

margaretclare

Hi

I went to Hargreaves Lansdown for my SIPP, mainly because they explained everything in the plainest of plain English. I consider myself to be an intelligent and educated person, but this area is what many non-experts call a 'minefield', and I needed the plainest English possible.

They've been very much on the ball with everything I asked them to do, very prompt, good at picking up the phone whereas Friends Provident (with whom I had my stakeholder) just wrote lengthy letters a week after I asked them a question. When I was thinking about putting my fund into drawdown and taking my 25% tax-free lump sum, H-L got an illustration and leaflets into the first-class post the same day. Similar discussions with FP produced the offer: 'We'll write to you a week from now....' and they never never never picked up the phone to clarify any points!

Margaret Clare

gataylor

dunstonh - thanks for the confirmation that I can't do what I want within a Hybrid.

EdInvestor - I didn't know there was a difference between a full SIPP and a low cost online SIPP, so thanks for pointing that out. Since my needs are straightforward and I've no urge to borrow against it or invest in property, a low cost online SIPP is indeed what I'm after. And thanks for the info on SIPPDeal and Alliance Trust. (Also - can I assume that your praise of SIPPDeal applies equally to SIPPDealXtra, or are there differences I should know about?)

margaretclare - I know exactly what you mean! You've eloquently summed up the way I feel about this new and frighteningly complicated world. And thanks for the positive thoughts on Hargreaves Lansdown - that counts as a plus for them in my book.

So, moving on, the four options I now have are:
* SelfTrade(SquareGain) and SIPPDealXtra
* SIPPDeal
* Alliance Trust
* Hargreaves Lansdown

I've gone through the charges sheets for transactions, and done some calculations. Given my fund size and my likely frequency and size of transactions, I was surprised that the annual cost doesn't vary much - the cheapest is £187.50 and the dearest is £245. That's close enough for transaction costs not to be a deciding factor for me - other factors will, I think, be more important.

Which brings me to my next area of confusion - commission charges. These could vary from provider to provider, or what they say could all equate to the same thing. I just don't know.

* SelfTrade(SquareGain) and SIPPDealXtra has nothing to say on discounts or renewal commissions.

* SIPPDeal says "All initial commission and any specially negotiated discounts on unit trusts and OEICs are passed on to your SIPP... Sippdeal Limited may receive renewal commision from fund managers."

* Alliance Trust says "ATS may receive commission out of the Manager’s annual management charge. Typically this will range from 0.25% to 0.50%." From this PDF it also looks like (selected?) funds have no initial commission.

* Hargreaves Lansdown says "0% for monies invested in the SIPP bank account and funds that pay us renewal commission. Obviously, funds have their own annual management charges, often in the region of 1.5%. For all other investments, we charge an annual fee of 0.5% + VAT up to a maximum of £200 + VAT per annum (charged quarterly in arrears)*" Additionally, the main SIPP page says "We give up all our initial commission to give you a better deal"

What does all that mean? Are some being more explicit than others but they all follow the same structure, or is there a substantial difference from one to the other?

Many thanks for all your help,

Geoff

EdInvestor

You need to separately look at several things IMHO

1.Dealing charges for buying shares, gilts, ITs etc
2.Are these applied when buying funds?
3.Rebates given by the Sipp provider on fund investments
4.Interest rates payable on cash
5.Admin costs ( transfer in, paying benefits,etc)already done

HL is usually cheaper for someone who predominatly wants to invest in funds as they don't charge dealing costs for purchase, so you only pay the fund annual fee ( HL takes the fund commission in lieu of an annual fee from you). But they are more expensive for anyone who is predominantly interested in shares, as for this person HL chargees an annual fee and the admin is not so hot (alleged).ATS will be cheaper for someone who wants shares and to do a lot of trading but doesn't need a sophisticated service - for the latter Sippdealextra/ST will be better. Sippdeal plain is better for someone who wants mainly shares and is LTBH.

My guess is your best bet will be Sippdealextra/ST, which scores on low dealing charges, good platform your like, excellent trustee admin and high interest rate on cash. But you will have to pay dealing charges on fund purchases, so keep those to a minimum..

cheerfulcat

A number of folks talk about Hargeaves Lansdown - can anyone compare their selection of funds and shares with SquareGain's? What's the interface like (I've heard the portfolio management isn't as slick as SquareGain's)?

The selection of funds is excellent; better than Squaregain's ( confusingly now called Selftrade btw ). Shares roughly the same though I'm not sure about ETFs - SG do them, HL mightn't. HL can be much more expensive for sharedealing depending on your deal sizes. HL's portfolio tool is by far the worst I have ever experienced; if you want to keep an eye on your trades be prepared to do this yourself in a spreadsheet or an online portfolio tool like that at Marketwatch ( click on My Marketwatch ) or ADVFN.

I have been threatening for some time now to move my SIPP from HL, partly because of the portfolio management and partly because their customer service can be pretty patchy when things go wrong. Having said that, I have no idea whether any of the other providers are any better; I have come to the conclusion that there is no such thing as even near perfection...which is why I'm still with HL.

HTH

Cheerfulcat

EdInvestor

Hi cc

I have two parallel accounts - a Sipp in drawdown with Sippdeal (broker is James Brearley)and an ordinary broker account with SG/Selftrade.The funds are about the same size and both majority invested in HYP shares so I don't trade that much.As far as crediting divis, transferring money,trading etc I find them very similar and both good.They both make occasional errors but are quick to fix them, their online customer service is very good - certainly there's absolutely no comparison with the normal pension providers in particular.

Selftrade is probably a bit better (and certainly cheaper) for trading, especially small caps, than Brearley, but can be more expensive than Sippdeal as it has an annual fee for a Sipp if you don't trade. ST fund discounts might be a bit better, but this might vary depending on the fund.

If you think you might want to put a Sipp into drawdown in the near future, then it's best to go for "phased drawdown" these days, following new A day rules. I would suggest Sippdealextra plus Selftrade in that case.

Otherwise it boils down to how much trading you do - my impression is that HYP afficionados find the cheapo Sippdeal plain vanilla quite satisfactory, as do I.

cheerfulcat

Thanks for that, Ed. I will have another look at SIPPdealextra ( works out cheaper than SIPPdeal IIRC?)

EdInvestor

works out cheaper than SIPPdeal..?

Sippdeal has no annual fee,but 15 quid a deal.Sippdealextra (with Selftrade) is 12 quid a deal but also charges an annual fee. So it depends how much you trade.

gataylor

gataylor wrote:

* SelfTrade(SquareGain) and SIPPDealXtra has nothing to say on discounts or renewal commissions.

I asked SelfTrade about this and I figured I'd share their reply for completeness' sake in case anyone else is interested. They say:

"The information we provide in our list of tradeable funds includes details of the discounts we have negotiated with the various fund managers. You will notice a column that details the Standard Initial Charge, which is the charge you would incur if you placed your order with the unit trust manager. The Effective Initial Charge is the charge you will incur when trading through Selftrade. We have a very good relationship with our unit trust managers and in the majority of cases have negotiated 3-4% discount. Indeed on some of our funds our relationship is so established with the unit trust manager that the effective initial charge to you is in fact 0%.

We do not pass renewal commission to our clients as there is a lot more administration involved in the trading and settlement of unit trusts. For example, unit trusts are not automatically settled through the CREST system but have to be manually settled. Also, they are not automatically traded online but require manual dealing slips and telephone trading. All this means that we have a dedicated expert team to trade, book and settle unit trusts. As a result of this we do not pass trail commission to our clients.

We have a dedicated team who maintain and set up relationships with unit trust managers and we are currently working to expand our range of tradeable unit trusts."

Hope this helps,

Geoff