Vanguard SIPP or Fidelity (via Cavendish Online)

anandp

With Vanguard's recent entry into the UK SIPP market, I was considering transferring my pension into their scheme.  But having used Cavendish Online's route to Fidelity (and therefore benefiting from their discounted deal with Fidelity), I am no longer sure which is better value from a fees perspective only.

Has anyone here on the forums done this analysis already?

bowlhead99

How much are you investing? Cavendish's fee is percentage based, with some additional  transaction fees if the holdings you have are ETFs. 
Vanguard's own SIPP also has percentage-based charges (which are lower than the aggregate Cavendish fee and Fundsnetwork fee) and they don't charge any transaction fees on ETFs.

Has anyone here on the forums done this analysis already?

There is not much 'analysis' to do if you are looking at which one is 'better value from a fees perspective only'. The fees aren't complex. 

Vanguard is 0.15% a year and capped at £375 (£250k invested). Fundsnetwork-Cavendish combo is 0.25% a year and dropped to 0.15% if you have £200k invested. 

Obviously if your view of the value perspective included whether you could get access to all the investments you wanted, and some of the investments you wanted were not Vanguard investments, you would be put off using Vanguard because they only retail their own products within the SIPP.

Sea_Shell

Do you have any news on when (if) Cavendish will be offering a Drawdown product?

bowlhead99

Sea_Shell said:

Do you have any news on when (if) Cavendish will be offering a Drawdown product?

No. At the moment their arrangement is that they are an intermediary for Fundsnetwork to enable you to get access to the Fundsnetwork platform at 0.2%, with you paying a 0.05% fee to them on top, which pays for you to get access to the product via them and make investments on an execution-only basis without advice.

However if you wanted to take drawdowns, Fundsnetwork would require them as intermediary to be able to say that you their intermediaried customer has received advice from them. on it. Which as a cheap execution-only service they are not going to provide, as they can't say it's appropriate or inappropriate for you to take a drawdown without assessing everything that needs to be taken into account.  So, they can't offer you drawdown options until they come up with a solution that could work within their business model.

Their FAQ says:

As we can't provide that advice, typically our clients will keep their pension with us to take advantage our our low charges while they are contributing to or maintaining their pension. At the time that they want to start making withdrawals from the pension (including the 25% tax free Pension Commencment Lump Sum) they will then transfer their pension away to another provider. 
We hope to be able to provide our clients with access to drawdown at some point in the future but as yet there is no indication of when that may be. 

Meanwhile at Vanguard, their product is in its infancy and they have started with launching the investment side of the product now but not the flexible drawdown side, so that nobody tries to use them to pay in or transfer in with the intention of getting a withdrawal this side of the 19/20 tax year end, risking disappointment. They are definitely launching drawdown options but not just yet:

And for those who are ready to start using their retirement savings, we’ll be launching our range of flexible drawdown options later. If you want to be the first to hear about these, you can sign up for email alerts.

Moe_The_Bartender

Funds Network isn’t a SIPP. The SIPP is offered by a different part of the group. 

bowlhead99

Moe_The_Bartender said:

Funds Network isn’t a SIPP. The SIPP is offered by a different part of the group. 

Fair enough, I was going by the language on their site that said, "This is because FundsNetwork require all clients linked to an intermediary to have received advice from that intermediary confirming that such actions are suitable for the client" and presumed the Fundsnetwork term to be shorthand for whatever legal entity in whichever part of the group (eg Fidelity something something) actually provided the pension to which Cavendish offered access and from which you might like to drawdown or take a lump sum.