SIPP without SIPP provider?

Linton

Barney683 wrote: »

Linton: I thought that was clear from the question! Not pay hundreds of pounds a year to a SIPP provider for doing nothing at all (the fund manager's take is quite enough already for my liking), and have access to funds listed on any exchange in the world (I've not found a SIPP provider who can do that - some won't even offer EUR denominated German funds, for goodness sake!).

Most funds are not listed on exchanges, they are only available from a fund manager. Perhaps you only want to buy ETFs?

To invest on a stock exchange as a small investor you need a broker. A SIPP platform combines the roles of a brokerage and an authorised pension administrator. I don’t see how you can avoid the requirement to pay someone to undertake these activities.

pip895

I think the OP would be better off asking which SIPP would be most cost effective for his circumstances. Some are very cheep for small pots others better for larger or infrequently traded ones.

HL are one of the more expensive options but they are cheap for very small pots which can cost tens of pounds rather than hundreds. You can even hold a huge SIPP with them invested in shares and etfs for only £200. Seems pretty reasonable to me and other providers may well be more cost effective still.

System

What the OP seems to be asking for is something like the rules regarding discretionary trusts. Yes, you could simply employ a solicitor or accountants to run it for you, but you are perfectly entitled to manage it entirely yourself.
You have to register it with HMRC, and complete an annual tax return, applying the special rules applicable to trusts. You are free to buy shares or unit tusts or premium bonds, and you can buy them in trust almost as easily as if personally owned.
You have to abide by the rules you set up when you formed the trust, and it can only be disbursed to beneficiaries that you nominated.


There are no fees for any of this, and no one checks that you are running it correctly. You are simply on your honour to do so. Obviously there are penalties, possibly severe ones, if you break the rules or misuse the funds.
You can be the trustee of the same trust that you are a beneficiary of. Unlike a pension trust there can be several beneficiaries of the same trust, and you, as trustee, have the discretion to decide the payments. There need be no other external trustees.


I appreciate that there are tighter rules for pensions because they receive tax concessions, but in essence isn't this what the OP is asking for?

Linton

A SSAS seems to be something like a trust as describe by Clifford_Pope. I don’t think it would help much with investment costs.

IvanOpinion

Can I suggest you stick your numbers into something like http://www.comparefundplatforms.com/.
It will give you an idea of who might be the cheapest for your circumstances. Personally I moved to II last year because they charge a fixed monthly fee rather than a percentage.

Albermarle

It used to be the case that you could structure a SIPP around other productive investments such as private businesses, or business assets including land and farms

You can still have bespoke SIPP where a larger range of assets can be included than the usual funds, shares etc . They are more expensive to run though as far as I know.

MallyGirl

Barney683 wrote: »

To the poster who (very belligerently!) insisted I should do some research as to what SIPPs actually are, what am I doing posting here if not research? And as to your suggestion that paying at least £500 pounds is warranted for the legal duties performed by the SIPP provider - I don't believe you. I'm quite sure this is all done electronically, without being seen by human eyes, with negligible cost.

I am with II and I haven't yet found anything that I wanted to buy but couldn't - admittedly I am an amateur investor. I don't pay £500 - I pay £19.99 a month for GIA, ISA and SIPP and that includes enough trading credits for me as I don't tweak it often.

Aegis

Yep, a SSAS sounds perfect. All you need is a company of your own to sponsor the SSAS (plus the associated costs of corporate returns), then you can invest in anything. Of course, you'll have to do all of the HMRC returns yourself, and if you make any sort of mistake leading to sanctions or other charges, it would all be on you, but this option is wide open if you really want to save yourself a couple of hundred pounds a year.


For the record, this is very tongue-in-cheek. A SSAS is huge overkill for most, and the potential for making a chargeable error is enormous. Still, if you want to see what "absolutely nothing" actually entails, go for it.


Putting it another way, SIPP providers aren't charities. They have to make enough money from you the customer to justify their existence and stay in business, otherwise they fold and all SIPPs held with them need to be rescued by a company which charges enough to survive. This means paying staff, rent, rates, insurance, etc. It's not just a matter of how much time you think they spend on your particular pension multiplied by an hourly rate for an admin, you have to factor in your share of all those other costs.

DairyQueen

Clifford_Pope wrote: »

What the OP seems to be asking for is something like the rules regarding discretionary trusts. Yes, you could simply employ a solicitor or accountants to run it for you, but you are perfectly entitled to manage it entirely yourself.
You have to register it with HMRC, and complete an annual tax return, applying the special rules applicable to trusts. You are free to buy shares or unit tusts or premium bonds, and you can buy them in trust almost as easily as if personally owned.
You have to abide by the rules you set up when you formed the trust, and it can only be disbursed to beneficiaries that you nominated.


There are no fees for any of this, and no one checks that you are running it correctly. You are simply on your honour to do so. Obviously there are penalties, possibly severe ones, if you break the rules or misuse the funds.
You can be the trustee of the same trust that you are a beneficiary of. Unlike a pension trust there can be several beneficiaries of the same trust, and you, as trustee, have the discretion to decide the payments. There need be no other external trustees.


I appreciate that there are tighter rules for pensions because they receive tax concessions, but in essence isn't this what the OP is asking for?

Several issues raised:
- the potential for tax fraud would be great and, presumably, would involve significant additional costs to HMRC to check/investigate individuals' claims. Especially as such a high %age of adults would be leaping on the 'operate your own SIPP' band-wagon. Trusts are much less common than PP pensions.
- the regulations applicable to pensions are onerous and change frequently
- the 'back-room stuff' undertaken by SIPP operators in order to comply with the above can't be over-stated. See example here (an example now outdated from 2013)
- responsible for dealing with HMRC on administering tax/tax codes/drawdown
- responsible for managing and reporting on crystallisation/inheritance/LTA and a host of other issues
- then there are the IT systems required to calculate/report against regulations and third-party audits are required. I doubt an excel spreadsheet could cope even assuming an individual has the knowledge to code/maintain the complex formulae.

I can imagine, for example, a situation where an individual recycles earned income via a SIPP (on which tax benefits have been received) into a company or commercial property owned by self/spouse. A tax subsidy on acquiring the asset, no CGT on sale and no liability for IHT. It would be an open house for tax avoidance.

Compliance is a major exercise in the pensions world. The chances of any non-professional having the knowledge and willingness to meet every regulation and reporting requirement would be nil. Who would police? The FCA? HMRC? At what cost?

Is the OP able to spend several hours a day fulfilling the multitude of complex tasks required of a regulated SIPP? Assuming, of course, that he knows what they are?

Gadfium

Barney683 wrote: »

And as to your suggestion that paying at least £500 pounds is warranted for the legal duties performed by the SIPP provider - I don't believe you.

In essence you imagined a scenario that was shown to be erroneous.



Now you imagine that the costs charges should *purely in your opinion* be lower. Whether you believe that or not is totally irrelevant. You are confusing opinion with facts and getting the hump when reality does not bend to meet your own personal opinion (all to commonplace these days). I you believed that gravity doesn't exist then would you be tempted to step off a 10 story building just because you believe that the world works the way that you imagine it???