Excessive or reasonable charges for managed SIPP?

dunstonh

1) Is there a point where the "initial fees" have been paid off and a reduction in monthly fees seen?

Initial fees are initial. On single premiums they have to be immedate only. On regular premiums, they can be spread over 12 months.

2) Do they provide a tiered charging structure, so as the fund grows I move onto a lower percentage charging tier?

A lot do this. Typically starting at 1% for smaller amounts and phasing down to 0.50%

If they don't provide a tiered structure, would I be better off moving to another IFA? My worry then is that I will incur another set of "initial fees".

There may be an initial charge but some may value the ongoing takeover.

Is there an IFA comparison site anywhere, a bit like comparethemarket?

No.


It may also be worth asking them about the platform charge. Standard Life Wrap is expensive but their other Standard Life Elevate platform would be 0.25%. That is 0.1% straight away. (there are others in the 0.2x% range too).

trf1960

Fronty, for the record I was feeling exactly the same as you just last week when I asked my IFA to clarify their charges and was told on my current £260k pension pot the charges are:

IFA fees = 0.75%
Platform provider (Transact) = 0.25%
Platform Fund Manager = 0.75%

1.75% = £4550 per annum.

I have another DC pension pot to add to this when I decide to take early retirement later this year which will increase my charges to around £6k per annum. It makes me shudder to think that amount is coming off any profit made but then I keep being told "you need to spend money to make money"! I just hope they are right.

beamyup

You could set up an account for example on AJBELL or HL and then transfer in from your existing provider.
If you wanted you could then up pretty much exactly the same portfolio that you have at the moment. the main difference would be that
1) the portfolio would not be adjusted over time - unless you adjusted it yourself
2) it would not be subject to a 1% IFA fee

Linton

trf1960 wrote: »

Fronty, for the record I was feeling exactly the same as you just last week when I asked my IFA to clarify their charges and was told on my current £260k pension pot the charges are:

IFA fees = 0.75%
Platform provider (Transact) = 0.25%
Platform Fund Manager = 0.75%

1.75% = £4550 per annum.

I have another DC pension pot to add to this when I decide to take early retirement later this year which will increase my charges to around £6k per annum. It makes me shudder to think that amount is coming off any profit made but then I keep being told "you need to spend money to make money"! I just hope they are right.

The fund manager charge is already in the fund price so it is not coming off the profit you may have thought you had made.

dunstonh

beamyup wrote: »

You could set up an account for example on AJBELL or HL and then transfer in from your existing provider.
If you wanted you could then up pretty much exactly the same portfolio that you have at the moment. the main difference would be that
1) the portfolio would not be adjusted over time - unless you adjusted it yourself
2) it would not be subject to a 1% IFA fee

Or rather than go to HL and double the platform charge, find an IFA at 0.5% p.a. (the dominant figure) and the IFA can either take over the Transact portfolio or move it to another platform at 0.25% (or lower). Then the cost for advice vs DIY with HL is just 0.25% p.a (or lower).

beamyup

dunstonh wrote: »

Or rather than go to HL and double the platform charge, find an IFA at 0.5% p.a. (the dominant figure) and the IFA can either take over the Transact portfolio or move it to another platform at 0.25% (or lower). Then the cost for advice vs DIY with HL is just 0.25% p.a (or lower).

I guess 0.25% for an IFA could be seen as good value, however you compared/contrasted with HL and not AJBELL for some reason? AJBELL is cheaper than HL and you could even compare with II (not sure though if those same funds are available within II - not checked)
Platform fees for funds i think are:
HL : 0.45% on first 250K, then 0.25%
AJBELL : 0.25% on first 250K, then 0.1%
II : Flat fee £320? (<0.1%)

Sorry if i have misread/misunderstood these platform charges?

What platform fees could a IFA provide exactly?
How much discount on other charges could an IFA provide?

Linton

beamyup wrote: »

I guess 0.25% for an ISA could be seen as good value, however you compared/contrasted with HL and not AJBELL for some reason? AJBELL is cheaper than HL and you could even compare with II (not sure though if those same funds are available within II - not checked)
Platform fees for funds i think are:
HL : 0.45% on first 250K, then 0.25%
AJBELL : 0.25% on first 250K, then 0.1%
II : Flat fee £320? (<0.1%)

Sorry if i have misread/misunderstood these platform charges?

What platform fees could a IFA provide exactly?
How much discount on other charges could an IFA provide?

II are £90/year for an ISA. This also provides you with £90 trading fee credits.

fronty

trf1960 wrote: »

Fronty, for the record I was feeling exactly the same as you just last week when I asked my IFA to clarify their charges and was told on my current £260k pension pot the charges are:

IFA fees = 0.75%
Platform provider (Transact) = 0.25%
Platform Fund Manager = 0.75%

1.75% = £4550 per annum.

I have another DC pension pot to add to this when I decide to take early retirement later this year which will increase my charges to around £6k per annum. It makes me shudder to think that amount is coming off any profit made but then I keep being told "you need to spend money to make money"! I just hope they are right.

Ah... so it's not just me then!

It does seem to me that I might be paying over the odds a bit, I have started a search for a nearby IFA that offers an investment management (I live near Basingstoke), I've stumbled across "Tilney" who offer an investment management service, but no idea what their charges are like, anyone know? I'll reach out to them and ask anyway.

fronty

dunstonh wrote: »

Initial fees are initial. On single premiums they have to be immedate only. On regular premiums, they can be spread over 12 months.

It may also be worth asking them about the platform charge. Standard Life Wrap is expensive but their other Standard Life Elevate platform would be 0.25%. That is 0.1% straight away. (there are others in the 0.2x% range too).

I'll ask about the initial fees. I joined them over 3 years ago and remember there was a hefty initial fee to pay but the way he wrote his email it almost sounded like I am still paying this... "The overall charges noted do also include the initial fees taken for the advice provided and set up etc."

I'll also ask about the Elevate platform, nice tip that thanks.

I really want to see if they will budge on the 1% though, if not then I am seriously considering moving, I don't want to be paying thousands in fees over the next 10-15 years if I don't have to. I'm just about to turn 50 so have a few years to go yet.

fronty

Was just breaking down my portfolio performance, my IFA summarised it as an average of 7.31% per annum. Simply looking at the per annum performance from years 1, 2, 3, start Jan 2016, I get these figures:

Yr1 (2016): +16.36%
Yr2 (2017): +8.42%
Yr3 (2018): -5.11%

However since January, the portfolio has gone up +5.32% YTD, so it's recovered the losses from yr 3.

This performance doesn't strike me as being particularly stella but I have no idea how this compares with other peoples managed portfolios. The dilemma of course is whether another IFA can do a better job for lower fees....?

Maybe I just ditch the IFA and stick the whole lot into a small number of global funds via II or AJBell etc. but then I'm back to having to keep an eye on them, which was the whole point of having an IFA do this for me in the first place.