Fidelity for SIPP
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dave875933
Posts: 29 Forumite
So, Fidelity are the only platform I can see that don't have exit fees and don't have specific admin fees. I'm attracted to this pricing model so have been studying Fidelity a bit more and have made some notes and reflections.
These notes are about a SIPP with Fidelity, not an ISA.
1. First thing is, it's not really a SIPP! (Well, I know most SIPPs aren't really SIPPs but it's even less so!) It seems you can only hold funds in it. There do seem to be a reasonable selection of funds on Fidelity however.
2. Key documents/webpages relating to the new charges seem to be as follows:
https://www.fidelity.co.uk/investor/funds/fund-charges/fund-charges.page
https://www.fidelity.co.uk/static/pdf/personal/guides/fidelity-fees-guide.pdf
https://www.fidelity.co.uk/static/pdf/personal/pensions/sipp/fidelitysipp-kfd-clientterms.pdf (This is fully updated and as of Feb 2014, unlike the ISA terms)
3. Taking these together I interpret them as saying quite clearly "no further admin charges". The only thing that is declared as being charged by Fidelity as a platform is a simple 0.35% fee on "investments with Fidelity". This reduces to 0.2% applicable to the whole of the investment if all investments (SIPP or otherwise) direct with Fidelity (ie not through IFA) amount to more than £250,000 (capped at £1m, or £2000 fee). I presume the fee will apply to cash balances even though it could be argued they are not technically investments. This would be fair I think even though it’s not crystal clear.
4. It used to be that you could get a Fidelity SIPP through everyone’s favourite non-advising advisors Cavendish, and pay less, but this doesn’t seem to be available anymore. I believe that SIPPs on Fidelity but through IFAs charge only 0.25% (even on balances under £250,000) under the new charging structure with everything else the same (subject to your agreement with the IFA of course), but that’s just memory from what I’ve read online.
5. The Fidelity SIPP application form is hidden behind a details form. I don’t like this. Just as companies should be open with their charging structures, so too with their forms. (Take forms links from: https://www.fidelity.co.uk/investor/help/forms-literature/forms.page). At least their SIPP transfer form is available. But what I really want to see is how a combined opening-transfer process is handled and the transfer form specifically states that it can’t be used if you haven’t already opened a Fidelity SIPP. As a note here Halifax seem to have the clearest and best set of SIPP opening/transfer forms and explanatory notes, better than A J Bell/Youinvest’s despite the fact that A J Bell run it for Halifax!
6. The fund switch form (ie for when you already have a Fidelity SIPP and for some reason want to send in a paper request) is available to download but it doesn’t give a timeframe on the fund switch disappointingly (it would be good to have this in writing on the form). There is a general comment on the website that it will be processed in two days for online requests depending on the time it is received (they didn’t specify what time), but I can’t remember where exactly. But this at least confirms that you can fund switch by post, and you can also over the telephone (at no further cost in either case, compared to excessive costs for other platforms). Which is good to know in case of online problems.
7. Fees are taken monthly from the SIPP cash account, and if there isn’t enough in this then they will sell holdings. The monthly part is good as a lot of platforms are charging either yearly or quarterly in advance and you will not get it back proportionally if you move (another unfair barrier to exit). The taking fees from within the SIPP isn’t so good. One of the benefits of RDR could have been to increase the amount you can get into the tax wrapper by dealing with payment of fees outside of it. However at least there are no “leveraged fees” or “exponential fees” (I can’t decide which of these to label them with!) eg late payment fees, interest on fees, fees for reminder letters or fees for selling holdings to pay fees which most of the other providers are introducing.
8. Security of website. I haven’t opened an account yet so can only check their first login page. At least they have an extended validation certificate (basically you see who owns the domain in the browser not just what the domain is) which many of the others lack. You might argue about the benefit of this but as a general rule of thumb the companies which take security more seriously have it. Not impressed with the fact it uses a customer number or personal details instead of username (although RBS do this and they are generally good) and asks for the full PIN though. I hope it has another stage of login but can’t tell. Also there doesn’t seem to be anything in the TandCs about who is liable in case of fraud. I think iweb or Halifax TandCs (can’t remember which) quite clearly states that in the case of fraud you will be reimbursed -they don’t even try the banking line which is that if you’ve not looked after your PC properly you won’t be. Anyway, computer security is something people should probably consider when switching providers although in some ways it’s less transparent than even charges! (HL and Halifax are the best in terms of their actual setup in my opinion, not sure about HLs terms.)
9. The interest that Fidelity will pay you on cash held in the SIPP account is 0.35%. (It used to be 0.65%) I like this as if I have to be in cash for some reason at least it will cover Fidelity’s fees and I won’t be going down! I think they start paying you the third day after fund settlement though. It is actually a minimum as well as if interest rates rise the rate is “Bank of England base rate – 1%”. I don’t think we should ignore interest rates in pensions! It is about transparency too as it’s another hidden revenue stream for them. Of course it would be good if platforms allowed you to get National Savings products or bank accounts in your SIPP too. Maybe after RDR it will be more likely.
10. I assume that no admin fees apply to the setting up of drawdown. They definitely don’t apply to the continuing of it and any payments/reviews. I’m not entirely sure this is a good idea actually as the capped drawdown does seem quite complicated. I think the other platforms have got it wrong charging as much annually for flexible drawdown though, and maybe even for withdrawals, as the flexible drawdown only involves a one off test.
11. Near the drawdown section there is something that says “there will be fees payable to Annuity Direct”. But I’m assuming that this is only if you buy through them initially and not a sneaky way of saying that you actually have to use them to set up drawdown.
12. The fund choice seems OK but worse than HL, Youinvest and Halifax. Obviously no shares either which is the big one. The cheapest tracker I could find at the moment on Fidelity was 0.17% OCF, but in their Q&A they say they are bringing ones in that start at 0.09%. Compare with a possible 0.02% at Halifax. Someone made a good point about these figures being retrospective and subject to variation for the period you hold them for anyway mind you! Didn’t look much at managed funds. (I think an Aviva personal pension seems very good for if you want managed funds cheap BTW, as long as you don’t need drawdown.) The frontend/fund research selection tool is very processor intensive which doesn’t give me the impression that it’s been designed that well compared to those of other platforms. However I do like the fact it combines the OCF with Fidelity’s own fee to show you a total (but in a clear, broken down way!).
13. They will reimburse £300 exit fees. I think this is bad actually. I mean, not saying I wouldn’t be tempted to use it in some circumstances but I’m trying to think about the bigger picture as well. And it’s perpetuating the cycle of dishonest, marketing driven business practices. (Not as bad as II mind you who somewhat bizarrely charge transfer in fees but yet refund up to £240 of exit fees.)
14. I have no idea what Fidelity are like in terms of service and getting things done. It seems to be hard to find reviews online. On Reviewcentre Fidelity had a high score whereas other platforms had a low score but I was suspicious of some of the reviews as they seemed to emphasise exactly the points and make them in the same way that a marketer would (also they explicitly had a “social media” rep on there responding to the bad comments). Feefo seems a good review site but Fidelity aren’t on that. Hopefully people on here can comment if anyone bothers to read this.
15. The bottom line is take all the other charges that all the other providers want to throw at you in 1001 different contingencies and NONE of them apply here. Yes you are paying a bit over the odds for the service fee but it might be worth it for the worry of what you are going to want to do in the future and scrimping and saving around all the little charges, and wasting time arguing with customer denial about them! I’m still not decided yet mind you!
IMPORTANT UPDATE!!!
Thanks very much to zagfles for pointing out that you do have to pay for setting up drawdown - and not just pay a fixed fee but go through the hassle and expense of getting advice. The relevant terms in the new terms and conditions I missed and are as follows:
SO UNFORTUNATELY A COMPANY FOR WHICH I HAD HIGH HOPES HAS SHOWN A COMPLETELY UNDERHANDED APPROACH HERE.
Regardless of your opinion on the need for advice going into drawdown, it is clear that this is something hidden away in the terms and conditions rather than being clearly highlighted in the advertising on the website. Definitely DIRTY PRICING.
I am not totally ruling out Fidelity still, but I am very disappointed with this move.
These notes are about a SIPP with Fidelity, not an ISA.
1. First thing is, it's not really a SIPP! (Well, I know most SIPPs aren't really SIPPs but it's even less so!) It seems you can only hold funds in it. There do seem to be a reasonable selection of funds on Fidelity however.
2. Key documents/webpages relating to the new charges seem to be as follows:
https://www.fidelity.co.uk/investor/funds/fund-charges/fund-charges.page
https://www.fidelity.co.uk/static/pdf/personal/guides/fidelity-fees-guide.pdf
https://www.fidelity.co.uk/static/pdf/personal/pensions/sipp/fidelitysipp-kfd-clientterms.pdf (This is fully updated and as of Feb 2014, unlike the ISA terms)
3. Taking these together I interpret them as saying quite clearly "no further admin charges". The only thing that is declared as being charged by Fidelity as a platform is a simple 0.35% fee on "investments with Fidelity". This reduces to 0.2% applicable to the whole of the investment if all investments (SIPP or otherwise) direct with Fidelity (ie not through IFA) amount to more than £250,000 (capped at £1m, or £2000 fee). I presume the fee will apply to cash balances even though it could be argued they are not technically investments. This would be fair I think even though it’s not crystal clear.
4. It used to be that you could get a Fidelity SIPP through everyone’s favourite non-advising advisors Cavendish, and pay less, but this doesn’t seem to be available anymore. I believe that SIPPs on Fidelity but through IFAs charge only 0.25% (even on balances under £250,000) under the new charging structure with everything else the same (subject to your agreement with the IFA of course), but that’s just memory from what I’ve read online.
5. The Fidelity SIPP application form is hidden behind a details form. I don’t like this. Just as companies should be open with their charging structures, so too with their forms. (Take forms links from: https://www.fidelity.co.uk/investor/help/forms-literature/forms.page). At least their SIPP transfer form is available. But what I really want to see is how a combined opening-transfer process is handled and the transfer form specifically states that it can’t be used if you haven’t already opened a Fidelity SIPP. As a note here Halifax seem to have the clearest and best set of SIPP opening/transfer forms and explanatory notes, better than A J Bell/Youinvest’s despite the fact that A J Bell run it for Halifax!
6. The fund switch form (ie for when you already have a Fidelity SIPP and for some reason want to send in a paper request) is available to download but it doesn’t give a timeframe on the fund switch disappointingly (it would be good to have this in writing on the form). There is a general comment on the website that it will be processed in two days for online requests depending on the time it is received (they didn’t specify what time), but I can’t remember where exactly. But this at least confirms that you can fund switch by post, and you can also over the telephone (at no further cost in either case, compared to excessive costs for other platforms). Which is good to know in case of online problems.
7. Fees are taken monthly from the SIPP cash account, and if there isn’t enough in this then they will sell holdings. The monthly part is good as a lot of platforms are charging either yearly or quarterly in advance and you will not get it back proportionally if you move (another unfair barrier to exit). The taking fees from within the SIPP isn’t so good. One of the benefits of RDR could have been to increase the amount you can get into the tax wrapper by dealing with payment of fees outside of it. However at least there are no “leveraged fees” or “exponential fees” (I can’t decide which of these to label them with!) eg late payment fees, interest on fees, fees for reminder letters or fees for selling holdings to pay fees which most of the other providers are introducing.
8. Security of website. I haven’t opened an account yet so can only check their first login page. At least they have an extended validation certificate (basically you see who owns the domain in the browser not just what the domain is) which many of the others lack. You might argue about the benefit of this but as a general rule of thumb the companies which take security more seriously have it. Not impressed with the fact it uses a customer number or personal details instead of username (although RBS do this and they are generally good) and asks for the full PIN though. I hope it has another stage of login but can’t tell. Also there doesn’t seem to be anything in the TandCs about who is liable in case of fraud. I think iweb or Halifax TandCs (can’t remember which) quite clearly states that in the case of fraud you will be reimbursed -they don’t even try the banking line which is that if you’ve not looked after your PC properly you won’t be. Anyway, computer security is something people should probably consider when switching providers although in some ways it’s less transparent than even charges! (HL and Halifax are the best in terms of their actual setup in my opinion, not sure about HLs terms.)
9. The interest that Fidelity will pay you on cash held in the SIPP account is 0.35%. (It used to be 0.65%) I like this as if I have to be in cash for some reason at least it will cover Fidelity’s fees and I won’t be going down! I think they start paying you the third day after fund settlement though. It is actually a minimum as well as if interest rates rise the rate is “Bank of England base rate – 1%”. I don’t think we should ignore interest rates in pensions! It is about transparency too as it’s another hidden revenue stream for them. Of course it would be good if platforms allowed you to get National Savings products or bank accounts in your SIPP too. Maybe after RDR it will be more likely.
10. I assume that no admin fees apply to the setting up of drawdown. They definitely don’t apply to the continuing of it and any payments/reviews. I’m not entirely sure this is a good idea actually as the capped drawdown does seem quite complicated. I think the other platforms have got it wrong charging as much annually for flexible drawdown though, and maybe even for withdrawals, as the flexible drawdown only involves a one off test.
11. Near the drawdown section there is something that says “there will be fees payable to Annuity Direct”. But I’m assuming that this is only if you buy through them initially and not a sneaky way of saying that you actually have to use them to set up drawdown.
12. The fund choice seems OK but worse than HL, Youinvest and Halifax. Obviously no shares either which is the big one. The cheapest tracker I could find at the moment on Fidelity was 0.17% OCF, but in their Q&A they say they are bringing ones in that start at 0.09%. Compare with a possible 0.02% at Halifax. Someone made a good point about these figures being retrospective and subject to variation for the period you hold them for anyway mind you! Didn’t look much at managed funds. (I think an Aviva personal pension seems very good for if you want managed funds cheap BTW, as long as you don’t need drawdown.) The frontend/fund research selection tool is very processor intensive which doesn’t give me the impression that it’s been designed that well compared to those of other platforms. However I do like the fact it combines the OCF with Fidelity’s own fee to show you a total (but in a clear, broken down way!).
13. They will reimburse £300 exit fees. I think this is bad actually. I mean, not saying I wouldn’t be tempted to use it in some circumstances but I’m trying to think about the bigger picture as well. And it’s perpetuating the cycle of dishonest, marketing driven business practices. (Not as bad as II mind you who somewhat bizarrely charge transfer in fees but yet refund up to £240 of exit fees.)
14. I have no idea what Fidelity are like in terms of service and getting things done. It seems to be hard to find reviews online. On Reviewcentre Fidelity had a high score whereas other platforms had a low score but I was suspicious of some of the reviews as they seemed to emphasise exactly the points and make them in the same way that a marketer would (also they explicitly had a “social media” rep on there responding to the bad comments). Feefo seems a good review site but Fidelity aren’t on that. Hopefully people on here can comment if anyone bothers to read this.
15. The bottom line is take all the other charges that all the other providers want to throw at you in 1001 different contingencies and NONE of them apply here. Yes you are paying a bit over the odds for the service fee but it might be worth it for the worry of what you are going to want to do in the future and scrimping and saving around all the little charges, and wasting time arguing with customer denial about them! I’m still not decided yet mind you!
IMPORTANT UPDATE!!!
Thanks very much to zagfles for pointing out that you do have to pay for setting up drawdown - and not just pay a fixed fee but go through the hassle and expense of getting advice. The relevant terms in the new terms and conditions I missed and are as follows:
Fidelity does not provide annuities directly and you will also need to
seek advice for pension drawdown. We will introduce you to Annuity
Direct Limited or Retire Direct Limited, both authorised advisers
specialising in retirement, who will be able to give you advice on which
option will be best for you.
SO UNFORTUNATELY A COMPANY FOR WHICH I HAD HIGH HOPES HAS SHOWN A COMPLETELY UNDERHANDED APPROACH HERE.
Regardless of your opinion on the need for advice going into drawdown, it is clear that this is something hidden away in the terms and conditions rather than being clearly highlighted in the advertising on the website. Definitely DIRTY PRICING.
I am not totally ruling out Fidelity still, but I am very disappointed with this move.
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Comments
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I've had a Fidelity SIPP for 2 months now. I have a number of S&S ISAs with them also. I wasn't as thorough as you are at looking at all the charges when opening the SIPP and am still learning. I jumped to them 'cause my pension pot was with Standard Life's with profits funds, I wanted to see as many of my holdings in the same place, and I thought a SIPP would be more flexible.
Was a bit disappointed to find out their SIPP is funds only. They do have a Specialist SIPP which allows you to hold shares, but you need to have over £100K and I don't know how seamless their share dealing would be. They seem to be very fund orientated. Their Share Dealing ISAs are provided by Charles Stanley, not Fidelity. All sounds a bit clunky to me. I would really like my S&S ISAs and my Fidelity SIPP to have a great choice of funds and shares and for it to be presented seamlessly.
As I'm restricted to funds only, I'm wondering whether I would've been better off sticking to a personal pension that has lower costs. I'm hoping to be able to do a proper evaluation soon, or reach the £100K and see if their Specialist SIPP has enough to tempt me to stay.
With regards to logging in, after you enter the full PIN, they ask you for 3 random characters from your password. I feel that the security of the site is top notch (I'm a software developer though not web specialist).0 -
See http://forums.moneysavingexpert.com/showthread.php?t=4877432dave875933 wrote: »10. I assume that no admin fees apply to the setting up of drawdown. They definitely don’t apply to the continuing of it and any payments/reviews. I’m not entirely sure this is a good idea actually as the capped drawdown does seem quite complicated. I think the other platforms have got it wrong charging as much annually for flexible drawdown though, and maybe even for withdrawals, as the flexible drawdown only involves a one off test.
11. Near the drawdown section there is something that says “there will be fees payable to Annuity Direct”. But I’m assuming that this is only if you buy through them initially and not a sneaky way of saying that you actually have to use them to set up drawdown.
It looks like you have to pay for advice for drawdown!!0 -
See FundsNetwork scraps additional charges on pension
I understand that the ‘Fidelity SIPP’ now includes provision for drawdown provided by Retire Direct Ltd. They are able to provide the drawdown on an execution only basis (so no IFA needed) if that is what you want.
For more information on Retire Direct Ltd. see Retire Direct
NOTES:- This information does not apply to the 'Funds Network SIPP provided by Standard Life' product.
- Be very careful if you attempt to google Retire Direct. Retire Direct is NOT Retirement Direct Ltd.
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Do you have to pay them anything for the "execution only" service? What's the point of involving them just to access your own money in your SIPP?See FundsNetwork scraps additional charges on pension
I understand that the ‘Fidelity SIPP’ now includes provision for drawdown provided by Retire Direct Ltd. They are able to provide the drawdown on an execution only basis (so no IFA needed) if that is what you want.
For more information on Retire Direct Ltd. see Retire Direct0 -
The point is that in the past with the Fidelity SIPP there was no way of providing drawdown unless you attached a IFA (with the corresponding ongoing costs).What's the point of involving them just to access your own money in your SIPP?
I am not sure, but it I think this might even have required transferring from the 'Fidelity SIPP' to the 'Funds Network SIPP provided by Standard Life'. I understand that it was Standard Life who were continuing to insist on the attachment of an IFA, not Fidelity Funds Network. The 'Funds Network SIPP provided by Standard Life' also had additional charges for running the SIPP and also charges to enter drawdown and ongoing drawdown charges.
So, using your analogy, 'you were paying Standard Life to access your own money' and in addition you were forced to pay for a IFA even if you did not need advice.
See Fidelity - Charges. It appears that the 'Fidelity SIPP' now includes the ability to move into drawdown without charges. The link with Retire Direct provides the mechanism for administering the drawdown. I understand this also allows execution only drawdown. (i.e. no IFA needed.)
The charges usually made for drawdown consist of an initial charge, an ongoing charge and a fee for GAD recalculations. The only one of these not mentioned on the Fidelity - Charges page is GAD recalculations.
I suggest that it is worth investigating further. Retire Direct should be able to give you an illustration for a specific SIPP. This will have to include details of any charges.0 -
I'd prefer to deal with a company who were upfront with their fees rather than forcing you to go obtain a specific quote from a third party/subsiduary for a basic feature of a SIPP, ie drawdown. Fidelity ought to look up what the first letter of SIPP stand for.The point is that in the past with the Fidelity SIPP there was no way of providing drawdown unless you attached a IFA (with the corresponding ongoing costs).
I am not sure, but it I think this might even have required transferring from the 'Fidelity SIPP' to the 'Funds Network SIPP provided by Standard Life'. I understand that it was Standard Life who were continuing to insist on the attachment of an IFA, not Fidelity Funds Network. The 'Funds Network SIPP provided by Standard Life' also had additional charges for running the SIPP and also charges to enter drawdown and ongoing drawdown charges.
So, using your analogy, 'you were paying Standard Life to access your own money' and in addition you were forced to pay for a IFA even if you did not need advice.
See Fidelity - Charges. It appears that the 'Fidelity SIPP' now includes the ability to move into drawdown without charges. The link with Retire Direct provides the mechanism for administering the drawdown. I understand this also allows execution only drawdown. (i.e. no IFA needed.)
The charges usually made for drawdown consist of an initial charge, an ongoing charge and a fee for GAD recalculations. The only one of these not mentioned on the Fidelity - Charges page is GAD recalculations.
I suggest that it is worth investigating further. Retire Direct should be able to give you an illustration for a specific SIPP. This will have to include details of any charges.0 -
I am afraid that I don't understand how putting the fees on the website is not being upfront.I'd prefer to deal with a company who were upfront with their fees
I don't think the 'S' means that Fidelity have to do everything in their products themselves.Fidelity ought to look up what the first letter of SIPP stand for.
This site is supposed to be about saving money effectively. I suggested that this (Fidelity SIPP charges) is worth investigating further in that spirit. I hope users might find investigating it worthwhile.0 -
Where is the GAD calculation charge, or isn't there one? Where are the charges you have to pay RetireDirect, or aren't there any?I am afraid that I don't understand how putting the fees on the website is not being upfront.
You investigate it then. I'm not using a SIPP provider which can't even provide drawdown themselves and can't tell me what the charges are.I don't think the 'S' means that Fidelity have to do everything in their products themselves.
This site is supposed to be about saving money effectively. I suggested that this (Fidelity SIPP charges) is worth investigating further in that spirit. I hope users might find investigating it worthwhile.0
This discussion has been closed.
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