Fedup with sippdeal/youinvest/AJ Bell charges

I have a SIPP with those guys. I don't do a lot of foreign currency stuff but have a few US shares and the odd UK share that happens to be listed in USD which needs an FX.

Back in the Sippdeal days - per one of my contract notes from late 2012 - one of my first UK listed USD trades couldn't be done online (illiquid share) so I had to book it over the phone, which initially frustrated me that I had to pay a phone dealing fee, but they gave me a clean FX rate and the £29.99 phone charge on a £3k trade was less than I would have been paying at my other broker as an FX rate loading, so I was OK with it.

These days they have an explicit rate loading themselves of 1%, but that doesn't seem extraordinary compared to other SIPP providers. When you say 'bear no relation to actual costs' - how many pips off mid-market rate do you think they get? And what do you think they should charge for an FX loading? There are some firms charging 1.7% on transactions smaller than £10k (Hargreaves Lansdown) which is clearly not a cheapo comparison but just an example. Others like Charles Stanley Direct or iii also charge the same 1% that youinvest charge. There will inevitably be some providers that are better at low fee fx, but don't also provide SIPP wrappers.

I use TD Direct for most of my non-SIPP holdings that aren't held direct with managers. Their unwrapped trading account has a multicurrency cash account built in, which mitigates the effect of the high 1.5% FX fee as your EUR or USD proceeds can be used to purchase more shares in those currencies without a round trip to sterling. They can't offer this in their ISA but maybe they allow it in their SIPP. The range of markets they cover is among the best (17 exchanges, though 2 are phone only)

The pensions administrator for a SIPP held with TD is AJ Bell, Youinvest's owners. But presuming you don't have a problem with the actual pensions adminstration side of Youinvest, just the front end and dealing, you might be OK with a move to TD so you can use TD's dealing facilities. They are offering a token amount of cashback for transferring a SIPP to them at the moment http://www.tddirectinvesting.co.uk/choose-an-account/sipp/transfer-my-pension/

Obviously the 1.5% might be a dealbreaker if 1% is already a dealbreaker, and whether TD works for you will depend on what you hold in your portfolio (e.g. if you held a lot of funds but less than £250k, some other brokers are lower ongoing plaform fees). But if you are not a funds person and want something that has evolved from a stockbroker into a general platform, rather than a funds platform that evolved to a general platform, you could probably do worse than TD.

Glen_Clark wrote: »

Since these platforms charge nothing for maintaining accounts they have to make up for it somewhere. Its not in our interests for them to charge so little they go bust.

That's pretty much why none of the major platforms are doing free FX transfers. To accommodate it they have to develop and build an infrastructure. If they build the infrastructure and then all the customers say "ah it seems you've got the infrastructure already, and you're already employing staff and have the FX suppliers lined up, so there can't be any incremental cost to processing my trade, so I don't see why isn't it free" they are probably missing the point.

The vast majority of customers don't need to trade on foreign markets or do any FX so the cost of it should be skewed to the people who want it. Not that I'm a fan of paying 1%+ for FX but I can see where it comes from. Even if the money is pure profit straight to their bottom line - the profit is their reward for being in business, and they want it, so if they don't charge for FX they would just charge for something else.

Youinvest will be one of the cheapest platforms for some SIPPs but could be at the more expensive end for others, depending on how much of what you hold. I know since the last price changes some people were very vocal about leaving, while others are signing up all the time if anecdotes on this board are an indication.

I should say I didn't see much wrong with the stock quotes / spreads compared to other brokers- I do sometimes open two screens at once to check that one isn't way off. You can always check afterwards against reported trades using the stock exchange website or somewhere like ADVFN to see if you're out of whack for the same volume at the same time against other people's trades, and I haven't had issues doing that so I don't always bother.

TakeCareOfThePennies wrote: »

If they need more money to remain in business, then they should simply increase the trade commission.

I don't think all the other customers who don't need foreign currency settlement services and FX translation would really want the general trade commission prices to go up to support that service for a niche set of customers.

Its not exactly like integration with wholesale Forex platforms is going to be complex or expensive ! Infact if anything its going to be the cheapest part of their business compared to all the data feeds and hoops involved with nominee accounts and equities....

It could well be the cheapest part of their business. However if it is 1% of the overall costs and it is a service only required by 1% of the customers on a regular basis, you could see why they would just want to charge the 'normal' customers for 99% of the infrastructure and make the people that want the facility to trade overseas markets and need currency settlement pay for the rest.

Otherwise it would be like saying to your customers, "Hey! you'll be pleased to know that your monthly service is going up from £100 a year to £101 a year so that we can give you free foreign currency translations when you buy shares listed on the NASDAQ or the TSX!" There would be a few customers who would say great that's awesome thanks, and there would be a hundred thousand who would say, why am I paying more than your rivals just so I can get a better rate on selling my Microsoft shares when I don't even have any Microsoft shares I just have these funds and investment trusts over here which are all GBP.

As mentioned in my previous post, I'm not expecting it for free, but 1%+ is a bit of a nonsense.

And also as mentioned, at least give the customers an option of accounts denominated in different currencies. So as far as I'm concerned sippdeal just want to force you in one direction.

You'll find 15-20 online brokers, most of whom offer SIPPs, on this link http://monevator.com/compare-uk-cheapest-online-brokers/

It's not an exhaustive list, but after you've done the research on all of their websites, let us know what proportion of them have fx conversion charges of under 1% and offer multicurrency cash holdings? As I mentioned, Youinvest used to offer no or low extra fx loading but now it's explicit. Forum member SnowMan had a tracking spreadsheet where he was asking people to report the dividends they got from certain ETFs to determine the impact of the FX loading on the effective custody fee with different places. Cheapest was First Direct, who don't do SIPPs https://docs.google.com/spreadsheet/ccc?key=0AhA6Przq6KI1dDhNeEpDWUtRMW00WDFMN3FCTU5rTHc&usp=sharing#gid=2

It probably sounds like I'm 'sticking up for' Youinvest more than the average consumer should. Still, if you've ever tried running a business and working out how to allocate costs and charges across your customer base you will see their dilemma. Everyone wants something for free but sometimes you just need to cater to the lowest common denominator and charge some things as 'extras' to keep the general prices low. If there was an obvious rival with a better quality of service and better price structure for all circumstances we'd all be using them.