SIPP transfer fees & charges

Dohnuts

I want to move all my funds into a single full SIPP. I,ve already been through the protected rights issues and these funds are free from any concerns.

So the IFA I have spoken to has quoted the following fees, I'm now deciding if these are reasonable.

Initial transfer fee of all funds into a new SIPP - one off charge = 0.5%

Then annual charges which are
Fund management charge 0.81%
IFA ongoing advice charge 0.5%
Platform/admin charge 0.35%
Making the annual charge 1.66%

My funds would need to outperform my current growth by an extra 1% ... Not unachieveable but not guaranteed. I've been impressed with the IFA and the team who manage the funds, I'm paying for their expertise but I cannot find any cost comparisons anywhere

What rates do other people pay for similar services?

bigadaj

Very much depends on the size of your investments.

Would be a good deal on ten grand, looking expensive on a million.

In general looks fairly middle of the road, if you diy with basic tracker type options, or multi asset fettered or unfettered fund of funds to be more correct, you could get down to 0.5% all in but that would require a bit of effort and taking on risk and responsibility.

dunstonh

The platform charge is about right. The adviser charge is about right.

The fund charges are the same if you picked the same funds DIY or with any other adviser. So, in that respect they would be no different on a like for like basis. You can get cheaper funds and more expensive funds. However, if you can keep the bottom line under 1.75% on advised, then you are doing ok.

bowlhead99

bigadaj wrote: »

Would be a good deal on ten grand, looking expensive on a million.

In general looks fairly middle of the road, if you diy with basic tracker type options, or multi asset fettered or unfettered fund of funds to be more correct, you could get down to 0.5% all in but that would require a bit of effort and taking on risk and responsibility.

What multi-asset unfettered funds-of-funds are available at 0.5% all in? Are they any good? There are a variety of fettered ones for 0.25-0.5% plus platform fees, from managers investing in a mix of their own trackers. But obviously they are not very tailored/bespoke to personal circumstances.

I notice OP said they wanted to move their funds into a single "full SIPP". That sounds overkill if they don't actually expect to invest into individual company shares and bonds, privately held commercial property etc. If they are not going the DIY route anyway and do not value ultimate flexibility, perhaps an adviser might be able to hook them up with a simpler personal pension with lower platform fees.

Still, the platform and advice element of the total charge, even where expressed as a percentage, would probably see that percentage vary depending on the absolute amount of funds we're talking about. I agree it does make a difference whether you have £10k or £10m when considering the relative merits of a 0.5% advice fee or a 0.35% platform fee.

Dohnuts

Thank you all for your comments... Very helpful.
I'm investing £350k in funds ... No property
I looked at self managed and it comes down to time and knowledge of which I have little of both. A good IFA company feels right for me so whilst the charges might be on the high side given your comments and my research I feel comfortable with that.

Much appreciated

dunstonh

Dohnuts wrote: »

Thank you all for your comments... Very helpful.
I'm investing £350k in funds ... No property
I looked at self managed and it comes down to time and knowledge of which I have little of both. A good IFA company feels right for me so whilst the charges might be on the high side given your comments and my research I feel comfortable with that.

Much appreciated

They are not on the high side. They are where they are because they are using managed funds. A typical managed fund is around 0.75%. A typical index tracker is around 0.1%. So, if you take the 0.85% (0.35+0.50) and built a portfolio of only index trackers then you are looking at 0.95%. if you build a portfolio of only managed funds then you are looking at 1.6%

Use of managed or passive or combination is an investment opinion. Neither is right or wrong. However, managed is more expensive.

bigadaj

Dohnuts wrote: »

Thank you all for your comments... Very helpful.
I'm investing £350k in funds ... No property
I looked at self managed and it comes down to time and knowledge of which I have little of both. A good IFA company feels right for me so whilst the charges might be on the high side given your comments and my research I feel comfortable with that.

Much appreciated

As dunstonh says the largest part if the charge is from the managed funds, their charges are fairly average for that.

However you have a significant sum to invest which is certainly sufficient to allow a spread of investments.

Some people only use passive or active funds, however many will use a combination, it's common to use tracker funds in large well developed markets and potentially use active in more specialist areas. If I were you I'd speak to them and see if it's possible to combine this, with some savings in charges.

If half were in cheap trackers and half in managed funds then that could reduce the management fees to say 0.5% on average, and reduce your total costs closer to 1%, potentially worth the discussion at least.