Moving £40k SIPP to Flat Fee Provider advice

DoctorW

Hi all,

I've just hit the £40k mark with a SIPP held with BestInvest who have a platform fee of 0.30% - which means that i'm now at around £120 fee a year.

This is about the mark where I think it becomes more economical to move to a flat-fee broker, does anyone have any good recommendations on ones with a flat fee under or equal to £120 a year? without too many downsides like large transfer in/out fees that's cheap to buy funds? My current SIPP is about 5 different passive funds.

Thanks a lot

dunstonh

Is it really worth it? You could be out of the market for 5-10 days. Difference in cost is peanuts with that small amount and daily movements could mean the cost recovery takes years.

And then you have the time and effort required to save a few pence.

DoctorW

But if I'm moving provider the shares are never sold & re-bought right? Just transferred from one holder to another? So no risks of daily movements hurting I thought.

Plus, recovering the movements will take years for only £40k? (i know this is a lot to some people but it's relatively small in regards to daily movements) I thought the general advice was that the movements could go both ways and end up cheaper OR more expensive after they were transferred.

Surely paying flat fee capped at £120 a year is better than 0.3% slowly eating away more and more of my holdings each year?

Thanks Dunstonh

dunstonh

But if I'm moving provider the shares are never sold & re-bought right? Just transferred from one holder to another? So no risks of daily movements hurting I thought.

If both providers support in-specie transfers and you dont mind the months of waiting that can happen then that is ok.

Plus, recovering the movements will take years for only £40k? (i know this is a lot to some people but it's relatively small in regards to daily movements) I thought the general advice was that the movements could go both ways and end up cheaper OR more expensive after they were transferred.

Yes, you could gain from being out of the market but you could lose. Its not really worth it for such as small amount.

Surely paying flat fee capped at £120 a year is better than 0.3% slowly eating away more and more of my holdings each year?

Maybe when the value gets a bit higher it may be worth it. Not when you are exactly at the cap figure though.

Thrugelmir

X-O is zero charge for their SIPP. Investment options are limited to quoted securities though.

LHW99

Thrugelmir wrote: »

X-O is zero charge for their SIPP. Investment options are limited to quoted securities though.

Does that also include IT's or ETF's?
The Jarvis IM ISA used to allow shares and IT's, but not funds to be purchased (don't know about ETF's though).

dunstonh

Thrugelmir wrote: »

X-O is zero charge for their SIPP. Investment options are limited to quoted securities though.

I wonder if they will keep it at zero as the levies on SIPPs continue to rise through the FSCS and more is pushed towards SIPP providers. Plus, the FOS finding more in favour against the SIPP provider. And on top of the increased solvency requirements for SIPPs.

cloud_dog

dunstonh wrote: »

I wonder if they will keep it at zero as the levies on SIPPs continue to rise through the FSCS and more is pushed towards SIPP providers. Plus, the FOS finding more in favour against the SIPP provider. And on top of the increased solvency requirements for SIPPs.

I see X-O are changing their fees as of 1 August 2018.

They will charge £99+VAT but will reimburse the first years fees. The previously would charge the fee and reimburse as long as you had an X-O dealing account.

dunstonh

I suspect that will be a fee that creeps up.

The FCA announced, in May, a fee block change for 2019/20 that sees the merging the Life and Pensions Intermediation funding class with the Investment Intermediation funding class and moving pure protection intermediation from the Life and Pensions Intermediation funding class to the General Insurance Distribution funding class. Along with requiring providers to contribute 25% of the funding requirement for the insurance and investment intermediation funding classes.

Plus, the FSCS investment class limit is going to £85,000 (which applies to SIPPs but not most personal pensions or stakeholders which already have a higher limit * caveats apply)

So, up goes the FSCS levies for providers in SIPPs.

cloud_dog

This bit....Eh?

dunstonh wrote: »

The FCA announced, in May, a fee block change for 2019/20 that sees the merging the Life and Pensions Intermediation funding class with the Investment Intermediation funding class and moving pure protection intermediation from the Life and Pensions Intermediation funding class to the General Insurance Distribution funding class. Along with requiring providers to contribute 25% of the funding requirement for the insurance and investment intermediation funding classes.

Glad you finished with this bit....got it

dunstonh wrote: »

So, up goes the FSCS levies for providers in SIPPs.