Forum Home » Pensions, Annuities & Retirement Planning

Cheapest Sipp: build yourself a low cost DIY pension article - Page 21

New Post Advanced Search

Coronavirus: The latest from MSE


The MSE team is working extremely hard to keep the info we have about your travel rights, cancellation rights, sick pay (and more) up to date.
The official MSE guides: UPDATED MSE Coronavirus Guides

NEWSFLASH


New, free ‘Academoney’ course from MSE and the Open University launches
All the key areas of personal finance are covered, so that you can master your money decisions


Cheapest Sipp: build yourself a low cost DIY pension article

436 replies 173.8K views
1181921232444

Replies

  • gadgetmind wrote: »
    Yes, most HL customers are being seriously impacted by the fee rises

    no, most HL customers are mainly invested in actively managed funds, and are getting a small fee cut.
  • 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.

    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.


    Assuming the calculations are accurate, that's a pretty large amount to have invested in a single geographical region. You may want to consider diversifying a little more widely than a single country? Just a thought. :)
  • kidmugsy wrote: »
    You used to be subsidised by other customers.

    If that is the case - I still am, because the new charges don't start until 1 March. :)

    But seriously, I was persuaded to transfer my pension to them less than twelve months ago on the basis of their low fees. And now look what has happened.

    The transfer cost me quite a lot of money, but I thought well at least now I'm with a REPUTABLE broker who is offering good value, so at the time I obviously had to bite the bullet.

    Like gadgetmind, guess I'll have to consider moving elsewhere now. Annoying though. It's ridiculous to go from £24pa to £500pa (and rising) for no extra service whatsoever.
  • Perelandra wrote: »
    Assuming the calculations are accurate, that's a pretty large amount to have invested in a single geographical region. You may want to consider diversifying a little more widely than a single country? Just a thought. :)

    Thanks for the observation. And I know that's a view a number of folk would hold. But firstly I'm comfortable with it, and fairly confident the UK is not going down the pan just yet. :)

    And secondly, many of the larger British stocks are reasonably globally diversified. Oh, and I like the 'All Share' because of the wider exposure to SMEs too.

    But again, appreciate your view.
  • edited 29 January 2014 at 12:59AM
    dunstonhdunstonh Forumite
    101.2K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    edited 29 January 2014 at 12:59AM
    It appears the company is aiming to deter savers from using low-cost passive funds.

    No. It is to remove the cross subsidy and bias you have benefitted from.
    Is anybody else at HL in this position - hit by the new charges?

    Yes they are. All those that were taking advantage of the cross subsidy and bias as you were.
    But seriously, I was persuaded to transfer my pension to them less than twelve months ago on the basis of their low fees. And now look what has happened.

    A little bit of research would have told you that this was coming. The platform review has been under consultation for a number of years and whilst there were still a few lose ends this time last year, unbundled pricing was expected in the DIY market just as it was put in place in the advised market in January 2013.
    The transfer cost me quite a lot of money, but I thought well at least now I'm with a REPUTABLE broker who is offering good value, so at the time I obviously had to bite the bullet.

    Remember that the changes are not due to HL. They set their prices but they have to remove the bias.
    Annoying though. It's ridiculous to go from £24pa to £500pa (and rising) for no extra service whatsoever.

    What is ridiculous is expecting other investors to pay your way.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • FreecallFreecall Forumite
    1.2K posts
    Tenth Anniversary 1,000 Posts Combo Breaker
    ✭✭✭
    dunstonh wrote: »
    No. It is to remove the cross subsidy and bias you have benefitted from.



    Yes they are. All those that were taking advantage of the cross subsidy and bias as you were.



    A little bit of research would have told you that this was coming. The platform review has been under consultation for a number of years and whilst there were still a few lose ends this time last year, unbundled pricing was expected in the DIY market just as it was put in place in the advised market in January 2013.



    Remember that the changes are not due to HL. They set their prices but they have to remove the bias.



    What is ridiculous is expecting other investors to pay your way.

    So to summarise, it's all mikbeaches' own fault that he has been stung and he should not have been so greedy as to go for the cheapest option with a 'quality' company?

    In one post it rather sums up the attitude of the financial services industry.

    :sad:
  • dunstonhdunstonh Forumite
    101.2K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Freecall wrote: »
    So to summarise, it's all mikbeaches' own fault that he has been stung and he should not have been so greedy as to go for the cheapest option with a 'quality' company?

    In one post it rather sums up the attitude of the financial services industry.

    :sad:

    No. He has been lucky to get away with a cheap option for a period because they rules allowed it. Those rules have changed. So, he got the best he could whilst he could which is fine. However, those changes are not ridiculous.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • AlgieAlgie Forumite
    21 posts
    Eighth Anniversary Combo Breaker
    My HL SIPP charges are going from £24 to approx £1750 pa in March. I am moving to AJ Bell Youinvest where the charges are capped. They aren't the cheapest option out there, but I have my ISA investments with them and have been happy with their service so far. I will, however, be keeping an eye out in case they raise their charges too!
  • gadgetmindgadgetmind Forumite
    11.1K posts
    Ninth Anniversary 10,000 Posts Combo Breaker
    ✭✭✭✭✭
    dunstonh wrote: »
    However, those changes are not ridiculous.

    Perhaps not, but they have been unilaterally imposed without a low cost option of moving being offered. They are also overly-complicated, far more complicated than those of competitors, which rips to shreds HL's claim that the FCA has mandated these changes.

    My official complaint will be going to HL next weekend (currently at six pages!) and I'll be starting to move to more cost-effective platforms shortly afterwards. HL will either provide me with a free exit option or I will pay upfront and the FSO will (almost certainly) tell them to refund me further down the line.

    The good thing to come from all of this is that when the *real* fees are visible, people can change supplied to minimise these fees. It may take a year or so for real competition to emerge, but we're already seeing signs of it starting to happen.

    This industry is going to have to start *really* tightening its belt in future and accept that 65%+ profit margins can't last.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • dunstonhdunstonh Forumite
    101.2K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Perhaps not, but they have been unilaterally imposed without a low cost option of moving being offered.

    Why should a low cost option be offered? Wouldnt that introduce bias (the very thing that there shouldnt be?

    They are also overly-complicated, far more complicated than those of competitors, which rips to shreds HL's claim that the FCA has mandated these changes.

    The FCA mandated the changes. HL chose their charges. HL have come in expensive and with a wide range. Nobody can argue that (apart from perhaps HL!)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
Sign In or Register to comment.

Quick links

Essential Money | Who & Where are you? | Work & Benefits | Household and travel | Shopping & Freebies | About MSE | The MoneySavers Arms | Covid-19 & Coronavirus Support