Sipp management fees

gone2ground

Hi there, I have a SIPP invested in Spanish property and it runs for 3 years. I am now in my third and final year and have to pay upfront fees to the company who have invested the money. They received my application form on 10th March 2011 and it took until 24th May 2011 to complete the final transfer from the old pensions - I was constantly chasing the old pension companies myself to complete this as soon as possible. The investment monies were finally sent on 15th June 2011. The company have charged me upfront on an annual basis taking the money from my pension pot. The first year was £1200, the second £900 and the third £990. Now they have informed me that they will be taking a 4th years worth of fees because of the time lapse between receiving my application form and investing the money runs a couple of months into a 4th year. Is this right? They are not providing a years worth of service and still want to take another £990 from my pension pot - I wonder if anyone can also tell me (in leymans terms) what is actually done to warrant this amount of fees and if this is actually normal practice? Any feedback would be much appreciated.

gone2ground

Also, I remember the broker who was involved initially also assured me that they kept back an odd amount to cover all fees for the 3 year period, nothing was mentioned about a 4th year so they kept a few thousand and invested a round £30,000 for me.

dunstonh

Now they have informed me that they will be taking a 4th years worth of fees because of the time lapse between receiving my application form and investing the money runs a couple of months into a 4th year. Is this right?

You will need to check the agreement you signed with this company.

I wonder if anyone can also tell me (in leymans terms) what is actually done to warrant this amount of fees and if this is actually normal practice?

You are in an unregulated scheme in an area that is rife with scams. Nothing in that area is normal. If you go into these unregulated schemes in areas of high risk as you have then you need to be fully aware of the terms you are letting yourself in for. One assumes you sought advice from a UK regulated adviser or a solicitor based in the UK before entering into this high risk contract. What have they got to say about it?

gone2ground

Thanks for your reply. The investment was with Stadia Trustees who, it says, are authorised and regulated by the FSA - does this make any difference or is it the scheme that is a problem? I did read one or two articles where Tony Hales, MD of Stadia, said he personally travels the world checking the investment opportunities and, to be honest, it's not this I have a problem with. It's all down to the fees but, as you say, check the paperwork again and that is exactly what I am going to do when I get home. Next time, taking a lot more advice is certainly on the agenda. I thought I'd done this with this scheme but maybe I was talking to the wrong people?

dunstonh

he investment was with Stadia Trustees who, it says, are authorised and regulated by the FSA

The administrator may be authorised by the FCA but it doesn't mean the investments are.

If they have given you regulated financial advice then you have consumer protection. If you acted on no advice then there is very little protection. These sorts of investments are not meant for the average UK consumer. The regulator posts warnings along those lines.

Next time, taking a lot more advice is certainly on the agenda. I thought I'd done this with this scheme but maybe I was talking to the wrong people?

Stadia do not give advice by the looks of it.