Choosing a Sipp Platform?

gm0

When you have total costs (platform costs, fund costs, trade/incidental estimate), to compare the saving vs the SW scheme will be apparent.  This is not always easy. It took me a while to reconcile scheme fund unit prices with published index performance and stated drag - to confirm what my real drag was and be sure what the "compare" of SIPP costs was against for similar assets.

Like for like on asset allocation this is the effectively a discount (employer scheme subsidy) or a premium being paid to be in the insured (regulatory protection) wrapper rather than the 85k protection wrapper of a DIY SIPP.  As others have illustrated with posts on ETF OEIC you need to know your asset allocation AND your intended trading approach over time (rebalancing, more active, less active, none during accumulation) before the "cheapest" from those mentioned will be apparent. Cheapest while saving may not be cheapest in drawdown.

I went over this - a bit late in the day tbh - but my scheme (not SW) doesn't do partials - it's transfer out as cash and leave forever or stay.  My preference like others shown here would have been to keep a chunk in the insured scheme (platform hedging) and most importantly the scheme active for employer contributions and then move the other chunk to another platform where some different investments can be made to achieve the overall desired portfolio. In my example the especially weak link is the FI / gilt + bond options.  I am also waiting for my drawdown costs to be visible before switching the lot or starting to crystallise in situ

Work out what you want to hold and what the existing options are.  Establish trading behaviour assumptions while saving, de-risking before retirement and in drawdown.

The costs spreadsheet or desired holding types will guide you to the likes of II, AJB, Fidelity, or Vanguard - restricted fund range only matters if you can't hold what you want and the range is still wide vs occupational pension schemes.

There are a lot of options. But the cost optimisation decision requires you to think some other aspects through to a degree

cloud_dog

michaels said:

cloud_dog said:

There are other options available, michaels, if you are comfortable not holding OIECs, i.e. ITs or ETFs.  For example Fidelity limit the platform charge to £45pa, and AJ Bell limit it to £100pa (£25pq).

Hmm - is it worth saving a couple of hundred quid at most to put up with that restriction?  No one has mentioned iweb/Halifax  are there drawbacks to them?

If you see it as a restriction, then no, is not worth considering.  Just thought I'd throw it out there.  The priority is a provider that fits with your plans/structure/holdings, not the other way round.

michaels

Thanks again all for your input.

I'm a firm believer in efficient markets so my level of trading is likely to be negligible, more a matter of deciding what balance of stocks, bonds and cash I want and then deciding whether I want to have all this in one global fund and thus automatic rebalancing or whether I might want to tweak the balance myself (the proverbial don't draw from equities when the market is down chestnut) and thus have each asset class in a separate fund.

Later drawdown will come into play but it doesn't seem like there will be any costs in moving again if need be.

The II cashback offers seem to run in November-January so probably not worth waiting for.

I just need to find out form SW if I can actually move part of the pot whilst leaving everything running to accept my employer contributions.

Re the 85k protection limit, this would only seem to come into play during the transfer process when potentially the platform will have funds that are not yet invested (although presumably they should in theory be in a 'client account').  Is this a risk anybody worries about?

Albermarle

Hmm - is it worth saving a couple of hundred quid at most to put up with that restriction? 

It is not really a 'restriction ' . It just means if you are with Aj Bell; HL or Fidelity the normal % platform charge is reduced , if some of your investments are in ETF's ; IT;s etc . It does not mean you have to be all in . Also if you go into drawdown , I think HL and Fidelity are the only ones with no extra charges 

For example if you had £400K with Fidelity with half in IT's the charge would be £445 + a few trades at £10 each.

With II ( in drawdown ) it would be £360 minimum but probably end up a bit more .

At this level of difference it comes down to personal preference and maybe a view on the profitability and long term future of the platform, possibilities of future takeovers, mergers etc.

gm0

The risk of platform failure and administration (say due to a SIPP platform with illiquid exotic investments as well as mainstream exchange traded ones) going down in a blaze of lawsuits  is very very low.  Certainly if you stay away from the smaller ragged edge of the SIPP world. And to date although it has been tried administrators have not taxed normal holdings materially to wind one up.  

Personally I think fully insured pension pot is worth >0 and <a lot.    So I wouldn't just give it up for large assets for the same holdings for a cost saving of £200/year.  Your threshold might be £20 or £2000.  Only you can say. 

A few cautious people use more than one platform (at extra cost) more to prevent being locked out of all income during a failure and administration say frozen for 6-months to  one year.  This cautious approach may double your carefully chosen platform costs.  All eggs in one basket is never a totally great plan in any walk of life.   But if you hold cash, isas and buffers with another company then not a problem having a single SIPP. 

Design for the "continuity risks" you want to and accept the added complexity or not.

Albermarle

Personally I think fully insured pension pot is worth >0 and <a lot.    So I wouldn't just give it up for large assets for the same holdings for a cost saving of £200/year.  Your threshold might be £20 or £2000.  Only you can say. 

On paper I could save some money by combining two insured pots and one SIPP pot , but the difference is not that much and in fact the current cheapest pot is actually with SW . When I start to drawdown I might combine down to two , but only use one for active drawdown . In this case it would not be the SW pot as the website is not great and the  customer service response  is slow . However it is low cost for me , and 100% insured .

hyperhypo

I'm considering moving my ex employer sipp from Aegon ARC , partly crystallised for drawdown commencing April 2021. I believe Fidelity treat crystallised / uncrystallised funds as separate "virtual" accounts in drawdown (as does Aegon ARC)  but i gather some platforms combine both entities..does anyone know if II treats them separately , as for me, this would be an important consideration, as am likely to use the lesser uncrystallised portion as a growth area, and the other side for income/wealth preservation and would prefer it if they were logically separate. 

Albermarle

II treats them as one and there is just a % figure of how much is crystallised and uncrystallised.
You are right in that Fidelity separate them, but I am not sure which other ones do . HL is one I think.