My SIPP charges just quadrupled!
Discussion
I started a SIPP with Tilney/Best Invest a couple of years ago. There fee's seemed pretty good - 0.3%/yr. It's still relatively small (about £10k so far), so £30 or so per year admin fee. They've just written to me to say they're introducing a new additional quarterly charge of £30 onto the fees! For those with a huge pot, it probably isn't so significant, but to anyone starting out with something small, it's a bit of a kicker. They're blaming it on regulatory changes that are increasing their overheads.
Is it worth transferring to another provider, or just take the hit to stick with what I know? Are these about the going rates anyway?
Is it worth transferring to another provider, or just take the hit to stick with what I know? Are these about the going rates anyway?
You can benchmark the charges fairly easily online. I doubt you'd save much by changing provider.
I do think it's a bit of a cowboy practice when you sign up to something on certain terms and then they introduce charges with no prior warning. Personally I always consider taking my service elsewhere out of principle when companies do this (I did when Interactive Investor sent me invoices for 'administrative charges' for accounts with £0 value - no admin charges at the time I opened the accounts).
I do think it's a bit of a cowboy practice when you sign up to something on certain terms and then they introduce charges with no prior warning. Personally I always consider taking my service elsewhere out of principle when companies do this (I did when Interactive Investor sent me invoices for 'administrative charges' for accounts with £0 value - no admin charges at the time I opened the accounts).
I'm in the same boat. I am transferring out, having asked if they are charging any exit fees.
Apparently this £25+VAT quarterly admin fee was applied by EBS, their custodians, and was previously paid by Tilney/Bestinvest on behalf of their clients. This fee is now being passed to the client.
"We understand this is a change to the Ts&Cs you signed up for we are willing to waive any transfer and exit fees based on the request coming from your new provider within the next 6 weeks."
Apparently this £25+VAT quarterly admin fee was applied by EBS, their custodians, and was previously paid by Tilney/Bestinvest on behalf of their clients. This fee is now being passed to the client.
"We understand this is a change to the Ts&Cs you signed up for we are willing to waive any transfer and exit fees based on the request coming from your new provider within the next 6 weeks."
REALIST123 said:
If they can’t they shouldn’t offer to.
No doubt they’ll be squeezing the investor in other ways too.
It intrigues me why the OP has a SIPP for such a small amount. Who’s idea was that?
Got to start somewhere, currently putting in £500/month. What alternative to SIPP would you recommend?No doubt they’ll be squeezing the investor in other ways too.
It intrigues me why the OP has a SIPP for such a small amount. Who’s idea was that?
mjb1 said:
I started a SIPP with Tilney/Best Invest a couple of years ago. There fee's seemed pretty good - 0.3%/yr. It's still relatively small (about £10k so far), so £30 or so per year admin fee. They've just written to me to say they're introducing a new additional quarterly charge of £30 onto the fees! For those with a huge pot, it probably isn't so significant, but to anyone starting out with something small, it's a bit of a kicker. They're blaming it on regulatory changes that are increasing their overheads.
Is it worth transferring to another provider, or just take the hit to stick with what I know? Are these about the going rates anyway?
I was signposted to this, off the back of an email. Apologies for the dredge. The FCA introduced new guidance (FG18/7) before Christmas relating to variances in fee and charging structures. Worth a look. The FCA expects firms to consider FG18/7 when they review existing contracts and when they draft new ones, and that variation terms are transparent and not unfair. Is it worth transferring to another provider, or just take the hit to stick with what I know? Are these about the going rates anyway?
It also expects fairness in the validity of the reason(s) for using the variation term, the transparency of the variation term, provision for notice in the variation term; and provision for the freedom to exit the contract should a consumer not wish to accept the variation. It might be the case that although the provider has a clause that it can vary its fees, it may be in thin ground if it does not.
I am in receipt of a letter from a SIPP provider advising of an unforeseen charge (1% of fund value) levied against a number of clients relating to the consequences of a SIPP provider seemingly limiting its due diligence into a portfolio (containing a plethora of various ‘green energy/housing/recycling etc which are now illiquid of course) to the bond provider’s website. There is nothing in the T&C which refer to it. Although it has offered to repay the 1% in the event the client moves funds (they are, of course, unable to), the SIPP provider seems to have offered that should the clients elect to leave its service, it will retain the 1%.
https://www.fca.org.uk/publication/finalised-guida...
bmwmike said:
I find this a really odd statement and maybe that's my ignorance. Is there a recommended minimum amount for a SIPP? Surely the point is self investing?
I'm generalising, but you tend to find for smaller pension values, a good value personal pension option would be cheaper. As the fund gets bigger, basic SIPPs start to make more sense.bmwmike said:
EddieSteadyGo said:
I'm generalising, but you tend to find for smaller pension values, a good value personal pension option would be cheaper. As the fund gets bigger, basic SIPPs start to make more sense.
How big?Below £100k = a good value personal pension
£100k - £200k = not much difference in cost either way.
Over £200k = usually better to find a good value SIPP
swatches said:
Whats sort of fees are PP starting from?
The ones I have seen are 0.70% or 0.9% for the first tier which doesn't compare favorably with a SIPP (e.g. 0.25% platform + 0.24% fund)
To answer your question, I have used a PP previously which has a fee of 0.6% based on using one of the their ''lifestyling' funds. Which is an all in cost. I've not checked recently, but I would think a price around this level would still be possible when one of the big providers is running one of their promotions.The ones I have seen are 0.70% or 0.9% for the first tier which doesn't compare favorably with a SIPP (e.g. 0.25% platform + 0.24% fund)
Whereas with a basic SIPP, you have a series of other charges over and above the percentage fees you quoted. Individually these costs are not expensive (or unreasonable). But in my opinion, they add up to make the equivalent percentage a bit higher on a smaller pot.
This, from today’s Sunday Times, speaks volumes about the potential state of some of the more parochial SIPP providers. Too many were quite happy to look the other way, take the money and let clients money be invested badly. There are some very good SIPP companies, but most people will be better served with a decent, well priced PP - one that doesn’t come with a cheap headline figure but a plethora other other costs and charges.
https://www.thetimes.co.uk/article/dawn-of-a-new-m...
https://www.thetimes.co.uk/article/dawn-of-a-new-m...
Ginge R said:
This, from today’s Sunday Times, speaks volumes about the potential state of some of the more parochial SIPP providers. Too many were quite happy to look the other way, take the money and let clients money be invested badly. There are some very good SIPP companies, but most people will be better served with a decent, well priced PP - one that doesn’t come with a cheap headline figure but a plethora other other costs and charges.
https://www.thetimes.co.uk/article/dawn-of-a-new-m...
Isn't it the point of a SIPP though, to let the clients make bad decisions if that's what they choose to do? Self invested after all. Why does a SIPP provider have any responsibility here?https://www.thetimes.co.uk/article/dawn-of-a-new-m...
bmwmike said:
Isn't it the point of a SIPP though, to let the clients make bad decisions if that's what they choose to do? Self invested after all. Why does a SIPP provider have any responsibility here?
Yes, but it’s also one of responsible facilitation. If my kids wanted Haribo for tea every night and I gave it to them every night, they’d be happy.. but I’d be a bad dad. We have seen, from that piece, there have been far too many bad SIPP providers. Too many SIPP providers have allowed poor investment choices. Some might even say that many knew what was going on but chose to simply look the other way because of lax guidance from the Regulator. I know of many who were invested by IFA, into complete and utter crap on the basis of nominal due diligence, or none, into stuff like Strand Capital and Greyfriars Portfolio 6, and more recently, a highly punitive share class in a seemingly innocuous Standard Investment, inflicted en masse, onto steelworkers. Platform fee went from 0.25 -0.35% with Charles Stanley Direct. I have looked at swapping out of principle, but, I either have to move everything to cash and transfer that (with a fee, having doubtless incurred charges and poor pricing they magically are the ones you seem to get when buying or selling), or move in species and pay per fund.
Which means by the time I get somewhere like the 1980’s Atari interface of AJ Bell, who have a different fee structure but a fee of 0.25%, which could change, it will take until I’m drawing the f
king thing to break even, if I’m lucky.
I remember a great quote from this forum some time ago when someone was complaining about poor performance, I paraphrase to:
“Some people still think financial products are tailored to make the buyer money...”
Which means by the time I get somewhere like the 1980’s Atari interface of AJ Bell, who have a different fee structure but a fee of 0.25%, which could change, it will take until I’m drawing the f
king thing to break even, if I’m lucky.I remember a great quote from this forum some time ago when someone was complaining about poor performance, I paraphrase to:
“Some people still think financial products are tailored to make the buyer money...”
If you don’t mind me saying do, I think that final quote is a little *too* simplistic. There’s nothing wrong with a product, whatever it is, being designed to make everyone in the commercial distribution (sales!) chain money. But it has to be designed primarily for the end user. The Benefit has to be geared towards the end user, and if others *fairly* benefit through its design and provision when their input is required or used, then that’s ok too. None of us work for nothing.
I agree with the implication, or the premise, that financial services needs a top to bottom shakeout. As a nation, we rely on it for a lot of our wealth now, probably too much, so we have to be careful we don’t kill the goose that lays the golden (tarnished bronze?) egg. What we have to do though, is rip out the gratuitous sense of entitlement and greed that pervades. I am absolutely no liberal bleeding heart, and I’m certainly no reformed evangelist who has belatedly ‘seen the light’, but I’m someone who *has* seen the impact of other people’s wretched behaviour, behaviour which sees decent hard working men as nothing more than marks to be exploited, and it pisses me off.
As a practitioner, I’m done with paying relentlessly higher levies because crooks, spivs and greedy bds can’t keep their zips high and dry when they see someone with a few quid. This is just one reason why we have an advice gap. It’s a circle. Folk can’t afford advice so they incline towards something that glitters. That turns out to be a rip off, we all pay more through levies, advice becomes more unattainable.. and so the spiral continues. But, similarly, so too have consumers got to wise up.
The relentless quest to mindlessly make as much money as possible has to stop. Folk have to start planning within their means, and look on retirement similarly objectively, and within their means. The days of having thinking that a holiday buy to let on the Algarve as a viable means of funding a champagne retirement, or some insane investment promising a ‘guaranteed’ five times inflation, all have to be kicked into touch. Financial planning takes time, it’s boring, it’s dull and it’s tedious. But it has to be started early and it has to be started responsibly and realistically. Fine, max out the PCP when you’re twenty five and you’re in competition in the company car park, but don’t start crying when you’re forty, don’t have a pot to piss in, and think that because you read a few blogs, you can be master of the universe within six months.
It’s partly because consumers are desperate, partly because they are overly materialistic and greedy, partly because they are incredibly badly informed and read ‘advice’ from people who have a disproportionately high influence on their lives (in real world and online) that they fk up so much. So, yes, I agree with you that some/many/most products are intended to make an unreasonably large slug of cash out of you, but not all are.
I agree with the implication, or the premise, that financial services needs a top to bottom shakeout. As a nation, we rely on it for a lot of our wealth now, probably too much, so we have to be careful we don’t kill the goose that lays the golden (tarnished bronze?) egg. What we have to do though, is rip out the gratuitous sense of entitlement and greed that pervades. I am absolutely no liberal bleeding heart, and I’m certainly no reformed evangelist who has belatedly ‘seen the light’, but I’m someone who *has* seen the impact of other people’s wretched behaviour, behaviour which sees decent hard working men as nothing more than marks to be exploited, and it pisses me off.
As a practitioner, I’m done with paying relentlessly higher levies because crooks, spivs and greedy b
ds can’t keep their zips high and dry when they see someone with a few quid. This is just one reason why we have an advice gap. It’s a circle. Folk can’t afford advice so they incline towards something that glitters. That turns out to be a rip off, we all pay more through levies, advice becomes more unattainable.. and so the spiral continues. But, similarly, so too have consumers got to wise up. The relentless quest to mindlessly make as much money as possible has to stop. Folk have to start planning within their means, and look on retirement similarly objectively, and within their means. The days of having thinking that a holiday buy to let on the Algarve as a viable means of funding a champagne retirement, or some insane investment promising a ‘guaranteed’ five times inflation, all have to be kicked into touch. Financial planning takes time, it’s boring, it’s dull and it’s tedious. But it has to be started early and it has to be started responsibly and realistically. Fine, max out the PCP when you’re twenty five and you’re in competition in the company car park, but don’t start crying when you’re forty, don’t have a pot to piss in, and think that because you read a few blogs, you can be master of the universe within six months.
It’s partly because consumers are desperate, partly because they are overly materialistic and greedy, partly because they are incredibly badly informed and read ‘advice’ from people who have a disproportionately high influence on their lives (in real world and online) that they f
k up so much. So, yes, I agree with you that some/many/most products are intended to make an unreasonably large slug of cash out of you, but not all are. Gassing Station | Finance | Top of Page | What's New | My Stuff