Moving SIPP pension saving and drawdown from Fidelity to I.I. : cash or in specie in present times?

hyperhypo

Part of my ongoing belt tightening procedures involves a move away from Fidelity onto Interactive Investor.  Last year was on the margin of getting the reduced 0.2% platform charge, but not suprisingly, no longer.

I've found Fidelity easy to use and engage with but I.I. are offering £500 .to transfer before June  month end (at least to get things accepted and started), plus 6 months grace on their platform fee. Needs must.

 Apart from the I.I. form software not obviously set up to receive two different Fidelity account names and numbers, which i've messaged them over....I need to consider whether to transfer in specie or sell down on Monday and to transfer both savings / drawdown elements in cash.

I believe when i did a similar process 3 years back from Aegon to Fidelity i believe i sold down the funds ..Vanguard LS,  HSBC Global, and RL Sustainable  diversified, Baillie Gifford Managed and bought again when the transfer was complete. I don't recall giving it much thought or being concerned over it , at that time.

It makes sense for me to transfer to a fixed fee provider, re. cost control but i'm hesitating over how to go about it in the present turbulence - or whether i'm getting exercised over nothing.  I accept that i won't be able to make any drawdown when it's in progress, my question is whether to expediate the transfer by selling down and reinvesting when complete, or transferring in specie. I wouldn't be wishing to make any adjustments in portfolio.  What else should i  consider before actioning the transfer ?

draiggoch

Not sure of your age and requirements but From my understanding Fidelity have a protected pension age of 55 for when the change to 57 comes in 2028. May not be relevant for you but just in case.

Notepad_Phil

Personally I would always do an in-specie transfer where it it was available and the sums are significant. I know that on average there wouldn't be much difference between the numbers of winners and losers of transferring in cash, it's just that I would rather not take that particular near 50/50 chance.

Given how the market have been falling and rising recently, perhaps you could consider how much you would lose out by if you transferred in cash and the markets rose say 5% between selling and being able to buy on the ii platform? If that is a significant sum to you then maybe its better to do it in-specie.

dunstonh

I've found Fidelity easy to use and engage with but I.I. are offering £500 .to transfer before June  month end (at least to get things accepted and started), plus 6 months grace on their platform fee. Needs must.

You would have to do in-specie to make it viable as you could lose more than £500 in a day if you are out of the market.

However, in-specie could see you unable to trade on those funds for up to a year.

sheslookinhot

dunstonh said:

However, in-specie could see you unable to trade on those funds for up to a year.

Can you explain the trading restriction please ?

dunstonh

sheslookinhot said:

dunstonh said:

However, in-specie could see you unable to trade on those funds for up to a year.

Can you explain the trading restriction please ?

The bit you quoted actually tells you what you may not be able to do (whilst it is in limbo between the two).

MallyGirl

in specie takes a lot longer - weeks/months - and during that time you cannot do anything with the holdings

dunstonh

MallyGirl said:

in specie takes a lot longer - weeks/months - and during that time you cannot do anything with the holdings

I had one that took 12 months and that was fairly recently.   Usually, you recommend around 6 months as the expectation in case someone has any transactions needed in the short term but I am a bit more wary now.

hyperhypo

Thanks to all commenting on this....I've had second thoughts and put off this decision and cancelled my new a/c with i.i. under their 30-day cooling off period.

Perhaps another time.

redpete

Another issue with selling out, transferring the cash and buying back in... there might be trading costs for the sale and/or buy trades.  (ii charge £7.99 per trade for funds.)  For me the cost of trading was cancelled out by the saving in monthly fees within a few months.

MallyGirl

ii do charge for trades but part of the monthly fee is a trade credit so if you don't trade often it is covered by the fee