Danny Cox of Hargreaves Lansdown being pulled apart on Radio 4 Moneybox over new fees

hyposmurf

dunstonh wrote: »

You typically need 20k plus to get to 0.4% pricing.



That is Skandia life. Not Skandia investment solutions. However, dont rely on old posts as pricing is fluid and SKandia Inv Solutions has been affected by the platform review and is no longer low cost.

Is it still possible to get lower total costs via a PP than a SIPP? I've been looking around myself and once I've added on the platform charge, there doesn't seem to be much in it.I've also noticed that when you search for personal pensions they are harder to find and you end up being directed to SIPPS instead.

black_taxi_2

charges seem even more complicated and underhand now

dunstonh

black_taxi wrote: »

charges seem even more complicated and underhand now

Even though they are more transparent and fair....

hyposmurf

dunstonh wrote: »

You typically need 20k plus to get to 0.4% pricing.



That is Skandia life. Not Skandia investment solutions. However, dont rely on old posts as pricing is fluid and SKandia Inv Solutions has been affected by the platform review and is no longer low cost.

Hi Dunstonh is there now generally less advantage to use a PP for smaller post than SIPPS now (related to charges)?Just want to know if its worth me bothering to look at a PP over a SIPP.

bowlhead99

hyposmurf wrote: »

Hi Dunstonh is there now generally less advantage to use a PP for smaller post than SIPPS now (related to charges)?Just want to know if its worth me bothering to look at a PP over a SIPP.

In a SIPP, you can hold - individually self-selected by you - equity and preference shares and bonds of many thousands of individual companies, investment trusts, gilts, treasury bills, loans to individual governments, open ended investment companies, unit trusts, exchange traded funds, structured products... and in the ones with higher fees, individual bricks-and-mortar commercial properties and private equity or hedge funds etc etc.

If, like many people, your affairs are such that you do not want, need, or understand all those types of things and you don't have the time or inclination or skill to individually Self Invest across all those types of assets - then you do not need a SIPP, you only need a PP; the clue is in the name. For people with simple needs who are not driven by the need to tinker and invest in more exotic stuff in the pursuit of entertainment and/or potentially higher risks and rewards, they will be able to find PPs that are more than adequate for their retirement goals.

Sipp charges from many firms have been somewhat opaque in recent years, as fee income and commissions on one type of investment have subsidised the administration platform for another. What has happened recently is that things are being priced transparently.

So what this *should* mean is that you are increasingly able to get what you pay for, no more, no less.

If all you want to pay for is access to a reasonable set of funds investing across all main asset classes, you can do this efficiently through PPs. If you want to also pay for the infrastructure of a full-service stockbroker, and a trustee to immediately action every investment decision you make across the world markets "just in case" you ever feel the compunction to buy something more exotic for the portfolio, you can run your own SIPP with the help of a platform administrator.

All things being equal, and with the post-RDR /platform review fee environment being more transparent, you would expect the latter to be more expensive.

In some cases for particular sizes and mixtures of portfolios, a SIPP might be cheaper or indeed the only way to go if you want to hold some really specific fund operated by a really specific fund manager. For many it would not be.

I don't think it is relevant to ask whether there is generally less advantage now than there was before. What is done is done. The correct question is, is there still some advantage, or can there be an advantage, for me.

To that, my answer would be yes : because logic dictates that if you don't want bells and whistles you can save money by not buying a product that throws in bells and whistles. Of course, a large business with billions under administration can, to an extent, throw in some bells and whistles using the savings it makes from economies of scale. And different companies have different goals in terms of profit margins and business growth.

So it is not always the case that a company that mainly provides pensions and investment plans to individuals and employers and institutional investors, will always have keener prices than one that provides Sipps and ISAs and fund supermarket/stockbroking services to retail customers. You would have to look at each on its merits unfortunately.

But long story short, yes it is worth you bothering to look.

dave875933

Yes plus ca change. The adviser/platform fee has been made apparent but excessive charges have been brought in for admin related things which are supremely suited to being absorbed within economies of scale/IT. So I guess it's just to confuse and therefore reduce transparency not to be fair. Just what the finance industry has always excelled in.

In the case of the probate valuation one I pointed out it's even worse as it's on someone's death.

My take on SIPPs vs personal pensions: I think the thing about SIPPs is that previously you had personal pensions (of all description) which were sold by advisors many of whom went awol or clients found out they were massively leeching and then the clients found out that they had no idea how to exercise control over THEIR MONEY.

Traditional pension companies were not set up to allow consumers direct access online, which is a total game changer. Alot like when First Direct were the only bank to be able to do really complicated things make payments online (then later for free and instantly)!!! Well it took some time but at least the banks got there in the end, mostly.

So, anyway alot of these online platforms leeched massively too but at least ones like HL in particular actually did something useful with that extra money which was set up good IT systems which did what consumers actually wanted. For some reason (I'm sure others would know), the online platforms only offered "SIPP"s even though a personal pension would have been more suitable from a regulatory perspective for alot of their customers. (And even though most were not full "SIPP"s in the sense that they didn't allow the full range of investments.)

So, people went for SIPPs with online platforms and fund supermarkets because they were the only way to get a decent online shell to monitor and change your own investments online.

Even if all you want is funds, I think this is still generally the case, although traditional pension companies are improving.

I will say that at the moment traditional pension companies do seem on the whole to be more reasonable about admin fees and payments out and transfers out (probably as they've already been hammered by the regulators over past indiscretions in this area), which is unfortunate as it means from that point of view platforms are worse for allowing access to YOUR MONEY.

dave875933

Also long story short - yes it's worth bothering to look!

planteria

i just listened back to the Moneybox interview. i don't think he was mauled too badly at all, as it happens.

grey_gym_sock

i wouldn't have said he was pulled apart. (i didn't listen to it right away, either.) i thought the main problem was that he blatantly ignored some questions, and said his prepared spiel instead. which comes across as arrogant. it's better if you are prepared to go out of your way to answer the question; and then you can also make your own points.

bigadaj

grey_gym_sock wrote: »

i wouldn't have said he was pulled apart. (i didn't listen to it right away, either.) i thought the main problem was that he blatantly ignored some questions, and said his prepared spiel instead. which comes across as arrogant. it's better if you are prepared to go out of your way to answer the question; and then you can also make your own points.

True but answering your own question rather than that of the interviewer isa tried and trusted technique for politicians. This often works well if the interviewer isn't tough enough, doesn't work with paxman or humphreys but Paul Lewis isn't exactly a terrier.

I thought Danny cox sounded nervous and unconvincing but wasn't pressured enough on the key points and managed to get a couple of digs into justin modray.