Combine Fidelity Pension with ii?

Angie_B

Afternoon all. 

I have a SIPP with II currently invested in HSBC FTSE All World and worth approx. £150k. 

I also have a workplace pension with Fidelity invested in their “Global Equity” fund and currently worth approx. £400k.  The factsheet for the Fidelity Global Equity fund states that its breakdown is: 

L&G All World Equity Index Fund GBP Hgd    50.6%

L&G All World Equity Index Fund GBP            49.4%

I have just left the employer that this pension was through so I have the options now of leaving this where it is or transferring it out. 

I am 40 so no plans to access this any time soon, hence the 100% global equity in the pensions.  I have other investments in ISA / LISA / GIA via II and iweb which will fund any early retirement. 

Could someone help me fully understand the charges for each as I have now confused myself with the various ways the different platforms state things. 

 

II = I have a monthly fee of £21.99 which covers my SIPP, ISA and GIA.  The HSBC FTSE All World has an ongoing fee of 0.13%. 

Fidelity is where I get confused.  The fund datasheet says there is an annual management charge / TER (‘total expense ratio’) of 0.21, plus my pension plan says there are ‘transaction costs’ of 0.06, giving a total of 0.27%. 

 

Now, I am not sure if I keep paying the transaction costs on the Fidelity if I am no longer paying into the pension, but the Fidelity fund is obviously more expensive than the II.  Would I therefore be wise to transfer the Fidelity pension into II (there are no fees for doing this)?  I assume I would have to transfer as cash rather than in-specie?  

I appear to be able to partially transfer from Fidelity so could move half of the pension pot into II – is it wise to have two pension providers in case of IT issues, or is this something I can deal with later in life / closer to retirement?  Likewise, if I do transfer everything to II, should I split the pension investments between the HSBC fund and another global equity just in case? 

Any thoughts would be greatly appreciated.

dunstonh

Fidelity is where I get confused.  The fund datasheet says there is an annual management charge / TER (‘total expense ratio’) of 0.21, plus my pension plan says there are ‘transaction costs’ of 0.06, giving a total of 0.27%. 

Fidelity is actually following MIFIDII disclosure requirements.  II should do the same but many of these DIY platforms hide it away.

II = I have a monthly fee of £21.99 which covers my SIPP, ISA and GIA.  The HSBC FTSE All World has an ongoing fee of 0.13%. 

HSBC FTSE All World has transaction costs of 0.02%.   So, if II are disclosing the charges correctly, that 0.02% is what they should show for transaction costs and total cost should be 0.15%.   So, it appears you are misreading it or II are not disclosing it.

Funds have the same transaction costs irrespective of the platform you hold on the same fund on.   TC is about the fund.  Not the platform.

Now, I am not sure if I keep paying the transaction costs on the Fidelity if I am no longer paying into the pension, but the Fidelity fund is obviously more expensive than the II.  

Fidelity have a whole of market platform but they also have a cut down workplace pension where the fund charge and provider charge is bundled into one.    Which one are you on?  Its important as you need to ensure you include all elements of a the charges and not just one bit.  I suspect you in the cut down workplace version.

 I assume I would have to transfer as cash rather than in-specie?  

If you are in the workplace version you wont be  able to do in-specie.

poseidon1

All things being equal  and there being some kind of Fidelity  annual plan maintenence  fee, one would assume  you should  have a cost saving with ii for no other reason than the £21.99 p.m  flat charge across all your accounts remains static ( until their next increase)  regardless of how high the value of your various accounts increase.

 With Fidelity on their standalone  SIPP  you would have been on their 0.2% tier annual service fee tariff but presumably ( in your case) this is heavily discounted as a workplace related scheme.

What might give you pause for thought in contemplating  a move, is if you can't get the specific L & G funds you have at moment with Fidelity via ii,  and you are particularly enamoured with those funds. 

 In my case I left a large holding of a  Royal London fund with HL when migrating most of my business to ii, because the HL variant of that fund had specially negotiated terms I could not match via ii.    This results in a higher income yield achieved on the fund via lower negotiated costs. Notwithstanding having to pay HL's monthly fund charge, this remained a better financial option than selling up and buying II's version of the fund.

Angie_B

dunstonh said:

Fidelity is actually following MIFIDII disclosure requirements.  II should do the same but many of these DIY platforms hide it away.

HSBC FTSE All World has transaction costs of 0.02%.   So, if II are disclosing the charges correctly, that 0.02% is what they should show for transaction costs and total cost should be 0.15%.   So, it appears you are misreading it or II are not disclosing it.

Funds have the same transaction costs irrespective of the platform you hold on the same fund on.   TC is about the fund.  Not the platform.

To be fair to II, they do show it - I just missed it.  The II costs are 0.14 + 0.02 so a total of 0.16% for the HSBC All World on II.  

Fidelity have a whole of market platform but they also have a cut down workplace pension where the fund charge and provider charge is bundled into one.    Which one are you on?  Its important as you need to ensure you include all elements of a the charges and not just one bit.  I suspect you in the cut down workplace version.

Definitely the cut-down workplace version.  It took years to even convince our Employer to have a decent global equity option - we were limited to about 3 lifestyle funds for the first few years I was employed there.  I have checked the 0.27% listed in my annual statement and it tallies with the fee costs that are also listed, so I think the 0.27% is correct for the total fees for the Fidelity pension.  It is still significantly higher than the 0.16% (plus fixed platform costs) for II.  

If you are in the workplace version you wont be  able to do in-specie.

That is what I thought - so if I change I will have to request it into cash and then a move.  Perhaps slightly risky in the short term, but in the long term that extra 0.11% could really add up, being an extra £400-500pa. 

Angie_B

poseidon1 said:

With Fidelity on their standalone  SIPP  you would have been on their 0.2% tier annual service fee tariff but presumably ( in your case) this is heavily discounted as a workplace related scheme.

What might give you pause for thought in contemplating  a move, is if you can't get the specific L & G funds you have at moment with Fidelity via ii,  and you are particularly enamoured with those funds. 

Looks as though the fees for my plan on Fidelity are definitely 0.27%, so a saving on fees is almost certainly to be had on II.  

I am not particularly enamoured with the L&G funds - I had a very limited choice with my workplace pension options and this was the best of the bunch for a global equity tracker.  Everything else was either very UK-dominant or very conservative which, at age 35 (when selected), I felt was not necessarily the right choice for me, considering my timescales.