Parmenion SIPP Provider

segovia

My wife is talking to an IFA who has recommended this company as a SIPP provider. 

https://www.parmenion.co.uk/   

What do they do differently than say AJ Bell, Interactive Investor?

My wife has 200K in AJ Bell at the moment and the IFA said AJ Bell are expensive, I did the maths £239.00 per year including 12 trades in ETF's.  Excluding fund charges which on the current investment is 0.15% 

The IFA quoted and inclusive rate of 1.7% = £3,400 a year in fees. 

What does Parmenion give her that AJ Bell doesn't for the extra £3,200.00 a year 

Thanks 

J

MallyGirl

I would be expecting the IFA to explain that

segovia

Good question, I'll ask my wife what the IFA said. 

Albermarle

segovia said:

My wife is talking to an IFA who has recommended this company as a SIPP provider. 

https://www.parmenion.co.uk/   

What do they do differently than say AJ Bell, Interactive Investor?

My wife has 200K in AJ Bell at the moment and the IFA said AJ Bell are expensive, I did the maths £239.00 per year including 12 trades in ETF's.  Excluding fund charges which on the current investment is 0.15% 

The IFA quoted and inclusive rate of 1.7% = £3,400 a year in fees. 

What does Parmenion give her that AJ Bell doesn't for the extra £3,200.00 a year 

Thanks 

J

The 1.7% includes the SIPP platform fees , the fund fees and the advisor charge .
For AJ Bell you have only included the platform fees .

dunstonh

What do they do differently than say AJ Bell, Interactive Investor?

Platforms are mainly about service and software functionality and ease of use.   However, they all largely do the same thing. Just differently. 

My wife has 200K in AJ Bell at the moment and the IFA said AJ Bell are expensive

The last time I looked Parmenion were not at the budget end either.  More mid range. (0.3% on £250k).  You can get 0.2x% with cheaper ones and possibly into 0.1x%.  A J Bell has a more complicated tariff.  I just downloaded the latest one of theirs and it's 5 (of 7) pages of different charges.    Sometimes it can hit a sweet spot and other times it can be expensive.  Its pricing is more personalised than a flat rate platform.

What does Parmenion give her that AJ Bell doesn't for the extra £3,200.00 a year 

The adviser will need to clarify but when comparing charges you need to break down the three components.
Platform charges, investment charges and adviser charges.   

The adviser charges should be the same irrespective of platform.    Investment charges are usually the same (bar a small number of funds that may have superclean charging on some platforms).  So, it is platform charges where the difference usually is.  Unless the investments as also changing (although the IFA should consider using the existing platform for the new investments and cost compare that as well as functionality etc).

it is unlikely that the extra £3200 is down to platform charges.  It is probably down to investment and adviser charges.

Going for the cheapest platforms can come at a cost.  In my experience, the quality of service is lower and the functionality of the platform is reduced with the lowest cost platforms.  Although, there are some more expensive platforms that don't tick those boxes either.   

Parmenion is an ex-Standard Life owned small platform that was recently sold to a private equity firm.  My perception of it is that it tends to be used more by wealth managers using their DFM service.  Parmenion has been very active in the ESG investing style.   

When switching platforms, an IFA should be comparing charges and disclosing the differences and have justifiable reasons for recommending the transfer which should be agreed with you.  

segovia

The IFA fees are .7%, £1,400.00 

Reading the sales pitch the investments are Discretionary Managed Funds and the platform is for advisors only  

I am therefore of the opinion the .7% is an introduction/commission fee paid annually 

Albermarle

segovia said:

The IFA fees are .7%, £1,400.00 

Reading the sales pitch the investments are Discretionary Managed Funds and the platform is for advisors only  

I am therefore of the opinion the .7% is an introduction/commission fee paid annually 

Introduction and commission fees are not allowed .

When you employ an IFA , it can be for various reasons and they can help in various areas , not just designing an investment portfolio. For example on tax matters, general family finance issues etc 
In this case it seems they have delegated managing the investments to a DFM . In which case you would hope the IFA would reduce their fee, but some seem not to .

Albermarle

OP - Looking at your other thread , it seems you are planning to manage your own SIPP drawdown yourself.

As far as I know I do not think it is the norm for one part of a marriage having their finances managed by an ( expensive ) advisor and one DIY .( unless they were separated of course ) 
You are supposed to manage them together for optimum result, especially regarding drawdown and tax issues. Although it is a personal decision of course .

segovia

Albermarle said:

OP - Looking at your other thread , it seems you are planning to manage your own SIPP drawdown yourself.

As far as I know I do not think it is the norm for one part of a marriage having their finances managed by an ( expensive ) advisor and one DIY .( unless they were separated of course ) 
You are supposed to manage them together for optimum result, especially regarding drawdown and tax issues. Although it is a personal decision of course .

I have no intention of seeking the advice of an IFA, I went down that path and in the end decided I'll take the risk of managing my own affairs. I pay £200.00+ PA for my platform and 0.15% fund fees about £1,000.00 PA. I compared that to what an IFA was offering me at 1.5%, £8,750.00PA. I concluded that If I were to go down the IFA route it would be for a lifetime until I die or run out of money. Assuming I live for another 20 years I would be handing over £120,000.00 in fees compared to £20,000 sticking with my SIPP.   I decided to save myself £100,000.00 rather than take the risk a managed portfolio would make over and above the extra £100,000.00 fees. However, my wife likes 100% guarantees, very very very low risk, she has anxiety wakes up in the morning worried about things that will never happen, like a 3rd world war breaking out tomorrow.  All the more reason she can't afford an IFA, the risk profiling exercise would probably end up with her portfolio being in very low risk, low return  government bonds in which case the IFA and associates would be taking more than 50% of any profits. 

Albermarle

Yes it seems like you and your OH have somewhat different attitudes on this subject , so maybe a joint approach is not practical , but I was just making the point this is the usual route as far as I know.

Also your investment costs are very low ( 0.2% in total? ) which makes the differential with the IFA bigger than it would be for most people. Reading the posts on this forum , would indicate that most of the DIY investors are paying between 0.3% and 0.8% ( using some active funds presumably) 

dunstonh

 All the more reason she can't afford an IFA, the risk profiling exercise would probably end up with her portfolio being in very low risk, low return  government bonds in which case the IFA and associates would be taking more than 50% of any profits. 

You appear to have a very low expectation on returns if that is the case.  Thankfully, that is not the reality.