Fidelity offering cashback

L9XSS

I have a small SIPP with Fidelity already and my main SIPP with Vanguard. I also have a DB pension commencing payment at 65 (I’m 55 next year). 
Had an email from Fidelity with a cashback option (£20 to £1000 payment depending on value of pension transferred to them).
Basically if I transfer my £190k Vanguard pension to them before Feb 2022 then I will qualify for £500 cashback. Seems a good option.
Any thoughts?

Alexland

If you are investing in traditional funds then Fidelity's standard 0.35% annual charge is 0.20% more expensive than Vanguard's 0.15% which would be an extra £380 pa on your £190k unless with your small SIPP it brings your aggregate level of assets to £250k in which case you would qualify for Fidelity's reduced 0.20% wealth rate annual charge which is still 0.05% more expensive than Vanguard but you might be able to make up that difference from picking cheaper fund(s). Only really makes sense to move a large amount to Fidelity if you want access to the wider range of funds (even then II would be cheaper) or you will take advantage of their £45 cap on exchange traded assets.

L9XSS

Alexland said:

If you are investing in traditional funds then Fidelity's standard 0.35% annual charge is 0.20% more expensive than Vanguard's 0.15% which would be an extra £380 pa on your £190k unless with your small SIPP it brings your aggregate level of assets to £250k in which case you would qualify for Fidelity's reduced 0.20% wealth rate annual charge which is still 0.05% more expensive than Vanguard but you might be able to make up that difference from picking cheaper fund(s). Only really makes sense to move a large amount to Fidelity if you want access to the wider range of funds (even then II would be cheaper) or you will take advantage of their £45 cap on exchange traded assets.

Food for thought, thanks for your comprehensive reply. Very much appreciated.

Dazed_and_C0nfused

Will £380 of it go in extra fees after a year though?

michaels

How can I see what ETFs are on the platform and what the trading costs for buying/selling ETFs are - could I move in 500k for 18 months, put it in the ETF version of my current global tracker and then move back to II/iweb after 18 months if I wanted to go back into funds/get another bonus?

Probably not worth it given the time out of the market.

Alexland

michaels said:

How can I see what ETFs are on the platform

https://www.fidelity.co.uk/planning-guidance/investment-finder/

First select ETF and it gives you a text search box and several filters and if you click "View more filters" there is a "Product eligibility" dropdown where you can select "SIPP". If you want to be extra sure you could ask them in writing or ask one of us to check it looks tradeable in our SIPP accounts and someone on the forum might even already have it.

what the trading costs for buying/selling ETFs are

https://www.fidelity.co.uk/services/charges-fees/

"For shares, ETFs and investment trusts, Fidelity charge the following dealing fees, and there may also be government levies,  Stamp Duty or taxes that apply.

• £1.50 for deals as part of a regular savings or withdrawal plan, or for a reinvestment of income or a dividend.  
• £10.00 for online deals.  
• £30.00 for deals placed by phone.

On the "Fees in more detail tab"

"The portion of the fee you pay on exchange-traded investments (shares, exchange-traded funds (ETFs), etc.) within an ISA or SIPP is capped at £45."

could I move in 500k for 18 months, put it in the ETF version of my current global tracker and then move back to II/iweb after 18 months if I wanted to go back into funds/get another bonus?

Probably not worth it given the time out of the market.

Remember that quote about investing being like a bar of soap - the more you handle it the smaller it gets?

As there will be some time out of the market switching between your current fund(s) and new ETF(s) which on average tends to be negative (especially with ETF market spread or traditional fund dilution levy) you should only do this if you are entirely happy with the ETF choice and intend to stick with this as a long term investment. Once you are on Fidelity at the £45 rate then I doubt any II cashback to switch back would be really worth it given their higher ongoing charges.

If you are switching an ISA out of iWeb it might be worth leaving a nominal amount in your share dealing account so that you don't have to pay £100 to rejoin again but consider how incredibly slow iWeb are likely to be on either transfer direction - is it really worth leaving them for some short term cashback?

Albermarle

Dazed_and_C0nfused said:

Will £380 of it go in extra fees after a year though?

Yes , if the total amount on the Fidelity platform is < £250K and the investments are all OEIC funds .

If the amount was > £250K the platform fee drops by 0.15% to 0.2% ( for the whole amount , not just the amount over £250K ) 
For any  share/IT/ETF investments the platform fee is capped at £45 .

MX5huggy

Remember that Vanguard’s 0.15% fee is capped at £375 which means essentially everything after £250k is not subject to a platform fee. 

noclaf

Would anyone happen to know the minimum pension transfer value required to receive the £500 cashback from Fidelity?

I have a smaller pension (£35k) with an old workplace scheme, currently the fees are 0.64% using a Active BG fund, the other options are not great, some passive BlackRock options that I am not permitted to use and the others are all v pricey active funds(0.9%) or passive but with a disclaimer about being linked to reinsurance policies and risk of losing the whole lot (no FSCS protection).....curious if using a cheap ETF via the Fidelity SIPP would be a better option. However if the pension value is too low to receive the £500 cashback then likely not worthwhile.

Alexland

MX5huggy said:

Remember that Vanguard’s 0.15% fee is capped at £375 which means essentially everything after £250k is not subject to a platform fee. 

Yes but who would want to pay £375 to any platform? That's more than our entire family's platform cost for 4x SIPPs (well 6x but a couple of them are tiny), 2x LISAs, 2x S&S ISAs and 2x JISAs including all the trades we are likely to make in a year and the accounts we have give us far more choice than just Vanguard investments. Vanguard's high cap is cross subsidising the smaller uneconomic accounts.

noclaf said:

Would anyone happen to know the minimum pension transfer value required to receive the £500 cashback from Fidelity?

The cashback depends on the amount transfered and can be between £20 and £1000 so for your 35k pension they would give you £50.

https://www.fidelity.co.uk/pension-transfer/?intcmp=hero1_sipp_cashback-offer_nov_2021#cashback-offer

Albermarle

Would anyone happen to know the minimum pension transfer value required to receive the £500 cashback from Fidelity?

£150,000

In fact this level is where you proportionately receive the highest % cashback .