Cheapest Sipp: build yourself a low cost DIY pension article

EdGasket

That Sippdeal Custodian Fee sucks. They don't charge it on an ISA so why on a SIPP? Just money grabbing.

What I can't figure out is how they take the fee assuming one is fully invested and there is no free cash in the pension? Do they send you an invoice or request you sell some shares to pay for it?

gadgetmind

EdGasket wrote: »

Do they send you an invoice or request you sell some shares to pay for it?

HL will take the money from other accounts and do reserve the right to sell shares and funds to cover it if you make life hard for them. With BestInvest, we just have DDs set up and they take the ISA and SIPP fees every quarter.

Once everyone has shown their hands, I'm sure I'll be doing some consolidation.

Ssshnorbitz

I'm reading this thread with a great deal of interest.

I've got a £31k pot (opt out from SERPS at 17) that I am very keen to invest in a SIPP just purely for share trading.

I already have a maxed out S+S ISA with H&L thats invested in a mix of funds that I am more than happy with that I cant see me changing with the charge rises that are coming, I also have a final salary pension.

This additional pot is purely additional, but I cant see me making many more than 10 trades or so a year.

Based on that information which provider out there would give me the best deal on fees? Or am I bets just to sit on the cash till this whole fee thing is finalised?

Perelandra

EdGasket wrote: »

What I can't figure out is how they take the fee assuming one is fully invested and there is no free cash in the pension? Do they send you an invoice or request you sell some shares to pay for it?

Sippdeal/youinvest will sell shares/funds to cover their charges, and will charge you an additional fee of £25 plus VAT (£29.95 per holding from 1st Jan), for the privilege of selling your investments to pay their fees...

EdGasket

I have emailed Sippdeal/Youinvest to ask why the custodian charge has been introduced where no funds are held and also to find out how they will collect the fee assuming no cash in the Sipp. I will update here when I hear back.

To add insult to injury, their dealing website is down again ! If they are going to introduce more charges then they should at least provide a better service.

EdGasket

"Sippdeal/youinvest will sell shares/funds to cover their charges, and will charge you an additional fee of £25 plus VAT (£29.95 per holding from 1st Jan), for the privilege of selling your investments to pay their fees..."

Really? Where did you get that from? How will they choose what to sell? Doesn't seem quite right to me that they can do that without at least giving you the opportunity to pay by cheque or bank transfer..

Perelandra

EdGasket wrote: »

"Sippdeal/youinvest will sell shares/funds to cover their charges, and will charge you an additional fee of £25 plus VAT (£29.95 per holding from 1st Jan), for the privilege of selling your investments to pay their fees..."

Really? Where did you get that from? How will they choose what to sell? Doesn't seem quite right to me that they can do that without at least giving you the opportunity to pay by cheque or bank transfer..

Yes, really!

In this document- their new charging structure- it's at the top of page 3:

http://www.youinvest.co.uk/Resources/Content/PDF/AJBYI_Summary_of_changes_to_our_charges_and_rates.pdf

They choose your largest holding to sell. They do, at least, give notice if they're going to do this (and you'd hope that means gives notice, and the opportunity to pay the charge rather than disinvest).

mikebeaches

I currently have modest pension savings in a Hargreaves Lansdown Vantage SIPP. All of my money is invested in a single ultra low-cost FTSE all share index tracking fund with total management charges of 0.09%pa. In addition I pay HL a fixed £2 a month platform fee ie £24pa.

However, with the new charging structure the company has just announced - applicable 1 March '14 - the platform fee is to be swept away and instead a % of the whole fund value will be applied.

So, in addition to my annual fund charge of 0.09%, the current £24 to HL will rise to circa £495! And of course that is open ended, so as my savings grow so will the HL fees.

It appears the company is aiming to deter savers from using low-cost passive funds.

Is anybody else at HL in this position - hit by the new charges?

gadgetmind

Yes, most HL customers are being seriously impacted by the fee rises and the vast majority now seem to be planning their exit strategy.

HL seem to think they can retain enough business to remain profitable. Well, good luck to them, but they won't be retaining much/any of our business.

kidmugsy

You used to be subsidised by other customers.