SIPP Provider Review - BESTInvest cheap but funds not available for 12 days & countin

Banana-Man

I'd like to share my recent experience of consolidating some personal/stakeholder pensions into a single SIPP.


I compared Hargreaves Lansdown, BestInvest, TD Waterhouse and SIPPdeal and BESTInvest came out top for lowest start-up fees, dealing and for drawdown charges, which were my main concerns. So far so good.


BI told me it could take 3-6 weeks to effect the transfer of my pensions to the new SIPP. No problem.


BI said they were very concerned about "being out of the market" for as little time as possible. They said they would email me as soon as funds cleared. Sounds great but very disappointing in reality.



Pension transfer 1: Scottish Widows transfer took 5 weeks of which my money was uninvested for 4 or 5 working days. Not bad but I wish I'd known about being uninvested at the time I applied for the SIPP.


Also, they sent me an email 6 hours after I had noticed the funds were cleared. You may think this anal but I actually don't know if the funds had been cleared for a couple of days prior to this as I wasn't checking everyday and I only checked after I received a letter from SW saying the pension was shut down.


Pension transfer 2: M&S/HSBC transfer is still not complete after 6 weeks. HSBC told me they wewre asked by BI to send a CHEQUE (can you believe it?) with the proceed from my pension. As of today, these funds have been "out of the market" for 12 days. BI have not been able to even confirm receipt of the cheque which was supposedly posted 6 days ago.


I don't know if it is all BI's fault or some tardiness by HSBC. All I know is someone's got my money and the stock market keeps going up.


It goes to show that cheap is not everything. Maybe the other SIPP providers handle the transfer more efficiently. I'd be interested to hear others' experiences with TDW, HL and SIPPdeal.

I really wanted to recommend BI but I can't and would warn others about being uninvested.

gadgetmind

Yes, it is a slow and frustrating process, and one that I'm also going through right now. However, I was moving a few pots, and putting in some new funds, so it's all going to more or less balance out, I hope!

dunstonh

BI told me it could take 3-6 weeks to effect the transfer of my pensions to the new SIPP. No problem.

It would be better to say it can take 1 week to 6 months if they want to cover the typical range but most would fall under 2-3 weeks.

BI said they were very concerned about "being out of the market" for as little time as possible. They said they would email me as soon as funds cleared. Sounds great but very disappointing in reality.

You are typically out of market for 2-3 days with most providers. Some SIPP providers do not pre-fund so will wait for cleared funds. So, add a few more days on top for them.

Pension transfer 1: Scottish Widows transfer took 5 weeks of which my money was uninvested for 4 or 5 working days. Not bad but I wish I'd known about being uninvested at the time I applied for the SIPP.

SW have been taking only 2-3 weeks if you have discharge forms completed in advance. So, 5 weeks would suggest a snag or delayed paperwork. uninvested for 4-5 days would suggest no prefunding and waiting for cleared funds or a delay in the funds being transferrred or being matched.

Pension transfer 2: M&S/HSBC transfer is still not complete after 6 weeks. HSBC told me they wewre asked by BI to send a CHEQUE (can you believe it?) with the proceed from my pension. As of today, these funds have been "out of the market" for 12 days. BI have not been able to even confirm receipt of the cheque which was supposedly posted 6 days ago.

HSBC are typically slower (based on my experience which includes one in December). Many still use cheque but most use the options system and bank transfers. If BI specifically requested cheque then it sounds like they are using the old fashioned method which would add another week or two to it.

The reason cheque is favoured by some providers is that they dont have to marry up bank transactions with the transfer information. If the cheque is posted with the forms, they can get it in one go. If the options system is used then they get the information electronically within days but then have to find the entry on the bank statement to go with it.

Those that pre-fund and those that dont can make a difference with pensions. in case you are not aware of what this is, it is where the provider will invest upon receipt of funds and not wait for the funds to be cleared. Also, with contributions, they will give you the tax relief immediately and not make you wait for it. Withdrawals and switches will also be paid immediately and not wait for settlement. The provider funds it.

A good way to spot those that do not pre-fund is where you pay money in and the tax relief turns up a few months later or where you have to wait for funds to settle before you can withdraw the money or on fund switches where they take around a week to appear.

gadgetmind

dunstonh wrote: »

You are typically out of market for 2-3 days with most providers. Some SIPP providers do not pre-fund so will wait for cleared funds. So, add a few more days on top for them.

For my move from Skandia to BestInvest, I was disinvested on Dec 14th, funds arrived with BI on Dec 30th, still not available to reinvest on Jan 10th (today) and I'm not sure when they will be!

In this day and age, I'm not sure why it should take more than a few seconds!

Banana-Man

BI just called to say they've looked through the correspondence and it was HSBC that wanted to make the transfer by cheque and not a BI request.

This sounds right as the SW transfer went through electronically.

BI contacted HSBC who confirmed the cheque was sent 6 days ago by 2nd class post! Nice job HSBC!

In the land of faster payments the dinosaurs still live off the fat of Joe Blogg's pension.

I remember an ISA pot taking an interest holiday during a transfer a couple of years ago. I received compensation for that. I'll let you know what HSBC say this time.

Sobryma

I am just kicking off the process to move to BI from Skandia, it will be interesting to see how long this take given I am going the advisory route.

gadgetmind

After a mere 25 days out of the market, the money has arrived in my SIPP. I am less than impressed. As it happens, my fresh funds went 100% into equities, and the money I was moving will be going into cash, bonds and property, so it's not too bad, but it could have been nasty otherwise.

Banana-Man

BI confirm cheque received yesterday (8 calendar days after 2nd class posting by HSBC although post date stamp not confirmed).

BI saying it may be another 5 working days before funds are available for investing. If that happens my funds will have been uninvested for 22 calendar days. Fingers crossed the markets take a bit of hammering next week!

I wish SIPPs were available 15 years ago when I started my first personal pension. It seems you lose with high annual management charges, then the bid to offer spread and then you have to bear the risk that the market will hurt you for the 3 weeks it takes HSBC to send the funds to the SIPP provider.

If you are having a pension transferred it is worth asking your new provider to ask your old pension company to send the funds electronically. Also, ask you old provider if they are able to send it electronically. HSBC state they are only able to send proceeds from old M&S pension (which they now manage) by cheque. Pull the other one.

gadgetmind

Banana-Man wrote: »

If that happens my funds will have been uninvested for 22 calendar days. Fingers crossed the markets take a bit of hammering next week!

My fingers are similarly crossed as I still have some more equities to buy. It's not taking much to move things either way right now, and climbs are cautious while drops are rapid.

If you are having a pension transferred it is worth asking your new provider to ask your old pension company to send the funds electronically.

I'm going to do "in specie" moves from now on, which I have done in the past for ISAs but didn't do this time due to the work required to get everything into funds common to both platforms. In specie transfers should be getting easier in future, which is nice.

dunstonh

BI saying it may be another 5 working days before funds are available for investing.

That is a big negative of using providers that do not pre-fund. You will probably find similar delays in future when you switch investments. i.e. you may have to wait until settlement and funds are in before they repurchase what you want. Check to see if that applies.

If you are having a pension transferred it is worth asking your new provider to ask your old pension company to send the funds electronically.

Most use the options system now. So, its not an issue. If they dont use options, they wont do it. If they do use options, then they will do it. So, no need to ask.