Sippdeal shocker (& link to template complaint letter)

ey143

They could have been more reasonable for those who only trade equities and say that as long as x number of trades done in a year will not incur a charge. Dormant accounts are the ones which cost the firm.

They were good at bringing customers in with their free of SIPP custody charges before but now they have many clients, easier to lock them in or impose charges.

SnowMan

Have just applied for my Alliance Trust Savings (ATS) ISA account, and for re-registration of my Youinvest investments over to ATS.

For those doing similarly, just go to the main website and click apply. Write down the client reference they give you at the end of the application process (you will need it for the transfer later). You get a confirming email to say your account is in the process of being opened subject to checks.

Slightly reassuringly for those hoping for their flat charging structure to remain rather than percentage charge structure, the confirming email includes a heading lower down including the phrase 'flat charges'.

GREAT CHOICE, FLAT CHARGES, EXTRA BENEFITS FOR SHAREHOLDERS

The confirming email says they will send you a welcome pack.

You then need to complete an ISA transfer re-registration form which you can get from the forms and documents page here. You can check whether your clean share classes can be re-registered via their clean share class funds list available from here.

And don't forget if you are facing a large increase in charges, a quadrupling in my case, and you think the lack of mention of any waiving of exit charges such as re-registration charges is unfair (the re-registration charges being about 3 years worth of current platform charges in my case!), register a complaint with Youinvest with the view to taking it to the Ombudsman in 8 weeks time.

ey143

What guarantee is there that after moving to them they don't double back and start introducing higher charges. This has happened to lots of people before as different brokers respond to RDR at different times and capitalise on the move of new customers first.

Looking at their SIPP charges, they appear to be more than youinvest /Sippdeal anyway.

SnowMan

ey143 wrote: »

Never heard of Alliance Trust Savings before. Who are they and are they sufficiently large? What guarantee is there that after moving to them they don't double back and start introducing higher charges. This has happened toast people before as different brokers respond to RDR at different times and capitalise on the move of new customers first.

No guarantees but they have always been the most committed to a flat fee structure. If they stayed flat and increased their fee to £100 say that would still be half the cost for someone with say 100K in clean funds in an ISA account say. ATS dealing costs are higher but to an extent that is reassuring for long term investors who rarely trade as it makes their structure more sustainable.

And what is to say that Youinvest won't remove their £200 limit to the 0.2% charge, in their next move? If Youinvest try to get away with not waiving exit fees now then expect the same next time round and with the higher re-registration fee that is even more at stake on an ombudsman decision and they may get better at trying to defend the indefensible (look like they are making a miserable attempt this time if they do try it on). I certainly wouldn't want to stay with a provider like Youinvest that I couldn't trust.

It is for everyone to make their own decision (have a look at the monevator comparison) but I was just posting up some help for those who decide to go to ATS. Would be interested in who others are switching to.

ey143

Thx I will give it further consideration. But on the basis of trading equities only in a SIPP, the admin cost appears to be £130+ vat, correct?

westy22

I currently have SIPPs with both HL and Youinvest -the reason I had two separate providers was because my ITs and shares SIPP in Youinvest didn't cost me anything other than dealing charges. My HL Sipp is more of a mixed bag with ITs, shares, ETFs and funds.

I cannot, however, justify 2 lots of fees and costs so I will combine both in the near future.

Currently, the lion's share is with HL but my current platform costs are about £324 per year with them (I pay the full 0.5% £200 cap) and I expect that cost to rise (maybe significantly!) when HL announce their new price structure.

The maximum I would pay with Youinvest appears to be capped at £300 whatever I hold so I think that my HL SIPP will move to Youinvest.

ey143

Westy22 - I'm in a similar situation except that I have a mySIPP custody account with Attivo where I'm paying £600 a year for the ability to trade other asset classes including commercial property.

I'm thinking if I was to move my Sippdeal plan to them I save some £100 pa but need to still find another broker.

Selftrade tells me this am that they are not currently taking any new SIPP applications. I'm assuming they are also reviewing their charges too.

grey_gym_sock

an ISA with over £24k in funds will now cost less (if you don't deal at all) on ATS (£48 p.a., fixed) than on youinvest (0.2% p.a., capped at £100).

a SIPP with over £31k in funds will cost less (again with no dealing) on ATS (£162 p.a.) than on youinvest (£100 (assuming £20k+ total value) + 0.2% p.a., capped at £100).

though dealing in funds is cheaper on youinvest than on ATS.

OTOH, if you have less in funds (i.e. in OEICs and unit trusts - but you can have as much as you like in ETFs and ITs), youinvest will remain cheaper than ATS.

youinvest won't be the cheapest for everybody, but are still pretty competitive overall.

bowlhead99

ey143 wrote: »

Bowlhead99,
In summary, HMRC has written to me informing that Selftrade were negligent in not removing the stock from the isa when it should have became known that the position was not longer eligible to be held in the ISA (no longer listed on a recognised exchange in the USA).

Agreed, if they are running an ISA they ought to have a screening system to monitor what stocks qualify to be held in it and what stocks people with ISAs hold in them. From experience, a number of brokers historically did not seem to have very accurate monitors and sometimes it is the individual investor who notifies them they want to hold something the online system doesn't allow and the broker has to review it and flip a switch and let it in.

Clearly this is not great, so it's good that HMRC said they were negligent. Still, negligent in failing to follow HMRC rules on the wrapper they're administering does not actually mean you have suffered a loss caused by that negligence, and there is no concept of claiming damages if you haven't been damaged.

As a side note, to be honest, if you are holding shares in an individual company and you don't even notice when that company stops being listed in the USA (surely a major event for a small - AIM listed? - company), then one might say you should pay more attention to what you hold, particularly when it is a small risky company and the price has changed direction. I appreciate I'm not going to make a friend by pointing out your error though

2. Being forced to sell at a loss the very moment the stock became non eligible to be held in the isa (and I have to take the loss on the chin because its HMRC rules)
3. Being forced to sell at a greater loss 3 years later after it was found to be non eligible.

Now tell me, in simple words why you think Selftrade did not owe me a duty of care for their incompetence of not notifying me earlier so that I can make a decision as to a course of action!

By denying me the ability to sell at a lower loss earlier you think it's morally right that they escape unscathed even though they admit they messed up and fell foul of HMRC rules.

We are agreed (and HMRC and FOS apparently agree) that they should have notified you it was ineligible earlier. Part of FOS's attitude to complaints seems to be that the average punter is not competent to be left to their own devices and needs to be protected from themselves, and therefore your broker was best placed to tell you it was not eligible rather than you be monitoring your investments and tax rules yourself. I don't completely agree with that stance given you are a 20 yr veteran of investing and not a newbie and not a defenceless 90yr old granny, but I suppose its easy to have one rule for all.

However, you are taking a leap from that "I should have been informed earlier" to them "failing to notify so I could take a decision" and a big leap further to "denying me the ability to sell at a lower loss earlier".

I 'sort of' disagree with the "...so I could take a decision" because you can always make decisions about whether stocks should remain in your portfolio. They let you get away without selling a stock that the taxman wanted you to sell, but that failure to notify you didn't stop you taking a decision about whether you should continue to hold the stock.

But it is the last leap that I have a real problem with if it's the grounds for you claiming compensation: "Denying me the ability to sell at a lower loss earlier" ? As I mentioned in the last post, you have had the ability to sell at a profit or a lower loss every single working second that the market was open while you held the stock for a period of, I don't know how long but something more than two years. So it doesn't really wash.

When the stock went down to its low price and you sold it, you could have bought the shares back outside the ISA. Thereby, you'd have converted a paper loss to a real loss but maintained the asset exposure so that action would not 'lose' anything except a tax wrapper around those few low value shares. As you didn't do that, it's not like you're paying higher taxes in future when they bounce back to a higher price outside the ISA. So it is difficult to quantify what if anything you 'lost', tax wise.

I get the point that you would have made lower losses if you had acted to sell the shares as a forced seller at the top of the market instead of the bottom of the market. But the broker certainly didn't tell you to keep the shares until the bottom of the market. And, once you were forced to sell the shares at the point they enforced the HMRC rules, the broker didn't prevent you from rebuying the shares in a SIPP or unwrapped account if you thought the price depression was a temporary blip and had particularly wanted to keep them.

FOS has indicated that they would allow a claim for losses if I had CGT gains that exceed the cgt allowance.

That's good then, effectively they're saying that if HMRC are treating the losses as being inside a wrapper and not qualifying to be offset against unwrapped gains, they will make the broker sort you out for the tax on the gains, because you shouldn't have been allowed to wrap your losses. If instead you had made a gain and HMRC treated it as wrapped because they blamed the broker rather than you for incorrectly wrapping it, you would have come out on top. It seems like a win win.

Your issue is that you don't have any unwrapped gains in that tax year so are not out of pocket for any tax that you were prevented from offsetting that year. It is difficult to prove that you would ever have gains in the future that would have benefitted from having carried forward losses from the year in question. However, you could always try and make a case for that (i.e., it has not cost you gains relief this year but it will cost you in say 2015 when you have gains over the annual allowance and are missing your losses carried forward).

Apart from that last sentence, which may be of use if you haven't already pursued it, I think we would just have to agree to differ; seems the broker and the FOS (pre appeal) see it the same way I do. Good luck with it.

ey143

Sippdeal have just acknowledged my complaint and said that my suggestions (set a minimum no. Of trades for equity only SIPP clients rather than charge £100+) to management. Selftrade work this way and whilst not ideal, it does go someway to helping this business meet costs from clients who do not trade and incur costs for the broker.

She has confirmed that they have received a lot of complaints. I would suggest loyal clients make themselves heard to the company.

Bowl head99 - will reply you later.