Best Platform for £250 month SIPP in funds.

FIRSTTIMER

Hi,

Which is the most cost effective platform for a £200 a month SIPP (£250 with tax relief) payed in monthly and
with all funds as the investment option for the next say 20 years? H&L or AJBell?

I want one that auto reinvests everything and has a good
app behind it too - so I can keep track, ideally with charges taken from external account not investments?

Thanks,

MDMD

FIRSTTIMER wrote: »

ideally with charges taken from external account not investments?

It might be beneficial to have the charges taken from a cash account in the SIPP - that way you get tax relief on them.

BLB53

It will depend to some extent on the type of funds you intend to purchase. Some will limit charges for a portfolio of ETFs for example but charge for each monthly purchase. HL do not charge for purchase of funds but levy a higher platform charge of 0.45%...not so much a problem in the early stages but can be prohibitive as your pension pot grows over time.

Check out the options via this article from DIY Investor
http://diyinvestoruk.blogspot.com/2016/08/selecting-your-diy-pension-platform.html

FIRSTTIMER

Thanks for this. I!!!8217;ll be investing in Fundsmith Equity for the time being.

It!!!8217;s either 0.25 plus £18 yearly with AJ
Or
0.45 accross the board with HL

But on £250 a month - HL looks cheaper initially - at what point do I need to look at it? The breakeven point really.

Alexland

HL will be cheaper while the account balance is low but AJ Bell would be cheaper in the outer years.

The point at which AJ Bell becomes more preferable to HL depends on investment performance and if Fundsmith can keep up the circa 15%+ per year growth rate. What physical and mental state will Terry be in 20 years time? A few weeks ago I read his 1992 book 'accounting for growth' which I found on ebay for a few pounds and was impressed with his thinking. While he has his marbles he is clearly going to be a very capable fund manager.

You might also want to consider Cavendish who give discounted access to Fidelity FundsNetwork at 0.25% with no trade fees. This should be cheaper than HL and AJ Bell in all years. Fundsmith's website says their funds are available on FundsNetwork.

https://www.cavendishonline.co.uk/pensions/

Alex

FIRSTTIMER

cavendish does seem much cheaper - I bet there is even cheaper out there actually - but my concern is the relative volatility in such cheap prices with cheaper platforms and the potential for them to go bust....look at the lossess in nutmeg?

Alexland

FIRSTTIMER wrote: »

cavendish does seem much cheaper - I bet there is even cheaper out there actually - but my concern is the relative volatility in such cheap prices with cheaper platforms and the potential for them to go bust....look at the lossess in nutmeg?

Cavendish are reselling Fidelity who are one of the world's top 5 asset managers.

You could go direct with Fidelity and pay 0.35%

Alex.

ColdIron

You could usefully spend 20 minutes playing with this link. I don't know how often it changes its base data to keep up with changes (e.g. CSD) and sometimes question its accuracy, but it's certainly good enough for a few 'what ifs' with different timescales

http://www.comparefundplatforms.com/

If you use the Acc class of Fundsmith you won't have to worry about auto reinvestment. I wouldn't put too much store in looking 20 years out as these platforms, particularly the bargain basement ones, may need to increase their fees to stay viable or grow (e.g. CSD), or they could simply be bought out. Arguably HL, with their healthy 0.45%, would be less vulnerable to these concerns. The landscape now looks very different to what it was in 1998