Which SIPP provider?

snowcat53

I've been discussing pension drawdown and SIPPS in another thread and looking into which SIPP might best suit my needs. I have just looked closely at SIPPdeal and Alliance Trust Select (already ruled out HL).

I found it very interesting that Sippdeal has lower charges (no annual fee, no transfer in fee, etc) but they don't offer many low cost funds. In fact of the 2100+ funds on their list, only a handful have AMCs of under 1% (even after their rebate).
So no Vanguard. Blackrock are on but I see no low cost trackers.

This would appear to tip the balance (for me) in favour of Alliance Trust as the I think reduced AMCs would more than compensate for their 135+vat annual fee etc.

(On the other hand the SIPPdeal website is much better organised -the Alliance site is hard to navigate -no search facilty and some of the key info (on funds and rebates) is very well buried )

Any one else looked into this? Have I missed something ?

dunstonh

Blackrock class A pay a commission to the platform/provider. Blackrock class D do not (and are about 0.3% a year different in costs). If your SIPP provider/platform has the more expensive versions of the funds it is because they are taking an undisclosed backhander.

snowcat53

SIppDeal -entries are cryptic but those that have a letter appear to be class A, not D

examples
BLK UK A ACC
BLK UK INCOME FUND A ACC
BLK US OPPS CLASS A ACC

BLK UK INC
all 1.5% , less 0.25 % rebated to customer

Will they have to be more explicit about this in future?

dunstonh

snowcat53 wrote: »

SIppDeal -entries are cryptic but those that have a letter appear to be class A, not D

examples
BLK UK A ACC
BLK UK INCOME FUND A ACC
BLK US OPPS CLASS A ACC

BLK UK INC
all 1.5% , less 0.25 % rebated to customer

Will they have to be more explicit about this in future?

In those cases, the retail charge of 1.5% would see 0.5% going to the IFA and around 0.25-0.5% going to the provider/platform. So, if you are not using an IFA then you need to look at how much of a rebate you are getting. A rebate of 0.25% would indicate they are keeping the platform charge (which is fair enough) but also half the IFA charge.

Will they have to be more explicit about this in future?

Hopefully yes. Currently the platform review for 2014 will ban it but strangely, SIPPs are exempt from this. However, in the last update, the FSA did say it was considering including them. Also, the fund houses may push the issue anyway and before 2014 as they are already bringing out clean share classes. Look at Schroder funds. If the platform/SIPP provider offers the class Z version then they are the clean funds (0.75% AMC compared to 1.50%)

snowcat53

dunstonh wrote: »

Look at Schroder funds. If the platform/SIPP provider offers the class Z version then they are the clean funds (0.75% AMC compared to 1.50%)

No , all the Schroder funds are 'A' or don't indicate , and almost all are again at 1.5% with 0.25 % rebated.

It's strange as there a lot of SIPPdeal fans out there. Would like to hear their views.

I also spot that you have to be holding the fund at the key annual date to get the rebate so if you sold it before, tough.

Alliance Trust at least give you all the rebate they get.

jamesd

A key annual date? i expect rebates to be paid to the platform monthly, not annually. Perhaps a way to skim some extra money out of customers.

snowcat53

http://www.sippdeal.co.uk/Sipp/Offer/?wt.mc_id=10377&utm_medium=cpc
see funds list

"AJ Bell receive a rebate of a portion of the AMC from certain fund managers" [fair enough]

"1. Any annual fund rebate wil be paid into the SIPP...cash account on 28 Feb annually.
2. If you do not hold the fund on 1 Feb then you are not eligible to receive any rebate on 28 Feb of the same month" [ignoring the tautological 'month', tight]

LemonMeringue

SIPPdeal's fund list is only the funds where they receive commission.

They have lots of other cheaper funds like Vanguard which are available which don't pay them commission. You just have to pay a quarterly charge if you invest in them (£12.50 per quarter regardless of how many different funds you buy from memory).

I've got some Vanguard in my SIPP with them.

snowcat53

lemonmeringue - then their information is very misleading. The pdf states "This list has been designed as a guide to the funds available and to show the discounts we have negotiated...". The key features mentions thw 'wide range of funds... many with discounted initial charges - please see funds list for further details'.

Now I do indeed see in the charges sheet they mention the 12.50 per qtr under 'Custody of structured products and funds' - "if you invest in funds (other than those included in the Sippdeal Funds List) (sic) and/or structured products"

Grateful if you could point out to me if it mentions this anywhere else.

dunstonh

lemonmeringue - then their information is very misleading. The pdf states "This list has been designed as a guide to the funds available and to show the discounts we have negotiated...". The key features mentions thw 'wide range of funds... many with discounted initial charges - please see funds list for further details'.

Its a bit naughty if they haven't negotiated any discounts, as it sounds, but are just choosing to rebate a small amount of the natural trail.

SeniorSam

I moved my Sipp to HL just over a year ago, as I was disappointed with James Hay and Friends Provident. In the last 6 months my funds have grown by 6.2% and they are a selection of 5 Funds which I selected myself. HL is not so bad, but you need to be able to research your own funds and review them yourself, which is not difficult, just time consuming.

Sam