HL NOT most expensive?

zagfles

SnowMan wrote: »

The SCAM factor tells you whether having decided on a platform by cost, exit fees are likely to be material in relation to the annual platform charge.

So in this example where it is 1.7, it gives that warning, and translates easily as watch out if you have to leave, you will be charged over a year and a half's annual platform costs to leave. If if it had been a factor of 0.25 say, then the translation would be, it will cost me about 3 month's worth of charges to leave. So it is useful to look at the SCAM factor.

Any simple measure can't tell you everything though as you show in your example. The SCAM factor is there to compare exit costs with annual platform costs not to compare absolute £ exit costs between providers.

Think of the SCAM factor as an alert, once you have chosen your likely platform. If it is a high figure for your chosen platform, it is saying, you need to look into things more carefully as exit fees could be a material factor.

When you reach that point, if using my platform comparison spreadsheet, then look at the absolute exit charges in £ amounts shown in my spreadsheet. Also look at the chart showing the 'total platform charge assuming re-registration exit after one year'. Again that is a like for like comparison of absolute exit costs with the assumption exit is required after one year, so it shows who is really cheapest if you have to leave after one year.

OK fair enough. But can I suggest another cost to account for - the cost of taking money out! There is a significant difference in drawdown costs between platforms and those costs can be higher than the other annual charges.

For instance, on a £40k SIPP, HL will charge £90 every 3 years (before age 75) for the GAD valuation plus £12 to alter payment amounts, and £30 for one-off payments. So £34pa in on-going charges once in drawdown assuming you take the max out you can.

Fidelity insist you take advice or go via their subsiduary and say there are fees but don't say what they are.

II charge £180 to setup drawdown, another £180 every 3 years for the GAD review, and £150 per year for giving you your money back if you want more than the TFLS. Not sure if the initial setup charge includes the first GAD valuation. But anyway, ongoing it's £210pa if as above you take the max out you can.

It would be useful if these figures were incorporated in your spreadsheet - maybe with a few options like taking max TFLS & income from capped drawdown or taking flexible drawdown over n years?

Obviously not possibly with Fidelity unless you can get an indication of their likely charges, I could find any.

SnowMan

I deliberately missed your earlier post about incorporating drawdown charges :rotfl::p

But have to agree a comparison of drawdown charges is definitely needed. I am just wary I don't have the time to do that or to keep those charges updated.

Why not start up a thread with information on drawdown charges for different platforms, that could be really useful to collate what different platforms charge?

zagfles

SnowMan wrote: »

I deliberately missed your earlier post about incorporating drawdown charges :rotfl::p

But have to agree a comparison of drawdown charges is definitely needed. I am just wary I don't have the time to do that or to keep those charges updated.

Why not start up a thread with information on drawdown charges for different platforms, that could be really useful to collate what different platforms charge?

Good idea - will do when I get time...

Rollinghome

zagfles wrote: »

As I understand it a SIPP is not counted as part of the estate, so why would a probate valuation be required?

I made no reference to SIPPs.

HL have introduced a raft of new charges including for corporate actions, for printed contact notes, valuations etc. that may or may not affect certain people depending on their needs and type of account held. I pointed out that for anyone who might require a probate valuation from HL, for whatever purpose, the cost is exceptionally high compared with competitors and should be taken into account.

Some years ago HL were the cheapest around for the needs of many people. Now they are likely to be one of the most expensive because the prices of competitors have fallen and that is the reason why many people have been leaving - not necessarily because HL prices have risen.

So it would not be necessary for HL prices to rise, as you suggest, to have reason to move away - only that they became relatively more expensive or otherwise less competitive. That applies equally to SIPPs, ISAs and unwrapped accounts.

As others have pointed out, the high cost of either doing so or being locked in shouldn't be ignored.

grey_gym_sock

SnowMan wrote: »

The SCAM factor (suggested by Grey Gym Sock) is the ratio of the exit charges (by re-registration) to the annual platform charge.

the name was your idea, though

zagfles

For those who haven't seen it I've started a new thread on the pensions board for drawdown charges https://forums.moneysavingexpert.com/discussion/4922919

Catapult

Really appreciate you chaps putting the effort into making the comparison spreadsheets - very, very useful and most informative - thanks!
:beer:

paddytt

Help - where do I find Snowmans spreadsheet...?


thanks


TT

SnowMan

paddytt wrote: »

Help - where do I find Snowmans spreadsheet...?


thanks


TT

The latest version can be accessed from this post

http://forums.moneysavingexpert.com/showpost.php?p=64540489&postcount=15