SIPPs and costs

[back_in_the_game]

About 15 years ago I swept up an array of pensions into a Hargreaves Landsdown SIPP, which had a nice interface, seemed fairly priced and I managed the money myself.

As I now approach retirement, I want to consolidate this and my much larger occupational DC scheme into a single SIPP, which I will manage in retirement.

I do not need advice on the transfer.

However, given HL’s 0.35% admin fee (down from 0.45%) the total amount will be eye-wateringly expensive. Crazy money.

I am therefore looking for a flat rate admin fee (say £500), sensible dealing fees and a good interface.

I will mainly invest in funds, and some individual stocks.

I have tried comparison sites, but still am not sure who to use. A friend has suggested Interactive Investor but I cannot see what the interface is like.

One of the things I like about HL is their interface, charts, suggestions, research etc., which is very user friendly.

One more thing, I have seen a few ‘free’ SIPPs out there from names I don’t recognise. This is worrying, I don’t want ‘free’ as everyone has to get paid, I just don’t want to pay many thousands for a container/execution platform/interface, which in this day and age should be fairly low cost.

As a side note, both our ISAs are also with HL, and have similar % based fees, which again are a bit painful.

Any suggestions?

Thx, Tony

[Ravvie]

I started with HL for SIPP and held various ISAs etc elsewhere. I have switched all my ISAs to Interactive Investor, along with other funds. My SIPP remains with HL, though I plan to move it to Interactive Investor.

You should be able to access research without having an account.

The Interactive Investor app works pretty well. You can also login to an account online. I think this has a bit more functionality.

If you do move, you may need to sell and repurchase some funds, if they are on different charging rates for example.

With HL, they do have discounts against the underlying funds charges, so that may reduce the headline rate. Overall they are still rather expensive for large funds.

I can’t remember the exact fees for Interactive Investor but there is a monthly fee, some of which can be used as a trading credit. For a relatively inactive account (I tend to buy and hold mostly), it is very cheap.

[back_in_the_game]

That is very helpful.

I will do a deep dive and perhaps get everything over to them.

I assume HL target small fund values and those larger funds that owners just deploy and forget. Inertia is a terrible thing.

Thanks again for your help.

Tony

[PaulM]

I consolidated my various pots into an Interactive Investor SIPP for very much the same reason, visibility and transparency of fixed fees. I already had a trading account which made the move a bit more of a no brainer. I have found any enquiries I had promptly answered and the interface & app work well enough for me with useful tools. I hope that this helps but very much up to your own circumstances and your own decision.

[Jamiewednesday]

Imo HL have the best app and user interface/experience by far from the big brands. But it’s not the cheapest, perhaps as a result of this.

Depending on how much you have invested, Fidelity may be lower cost (their tiering on reduced costs depending on total invested is across all your invested funds, not just the bit that crosses the tier) and is free on the funds at £1M +. Plus you can link say Mr and Mrs accounts to get you across the tiers and then all accounts in both names get the lower cost.

The functionality of the interface and App. is not as decent as HL and some newer, perhaps more niche, funds may occasionally not be available (though you can request they be added). They do however have very good, largely UK based customer service on phone and email. You will likely be speaking to a human being not a bot!

You would likely be able to arrange an in-specie transfer and they may even offer you a few quid to encourage you…

NB. ii may well be cheaper again. I haven’t looked at the interface in a while and I don’t know about the availability of funds.

A big note here tangentially, I have a client whose partner (who held ii SIPP, GIA and ISA) has just died, ii’s help has been ‘functional’ rather than nice and efficient, so she’s asked me to help her through it all as ii aren’t particularly accommodating in their assistance and he wasn’t even my client!

Something to bear in mind perhaps, especially when considering other people and particularly so when IHT on pensions becomes a thing next year because, believe me, that whole process is going to be incredibly, unbelievably awful for everyone involved.

So, everyone with a SIPP should examine the new rules very closely, make sure your beneficiaries know exactly how to negotiate through the minefield of admin., the timing of and sequence of events required , plus the options available and how best to access the benefits, don’t rely on a legal adviser who would in all likelihood just tick the ‘take the money box’. And leave your personal representatives a substantial reward because this is going to drive them nuts and be quite stressful. And they are jointly liable with the estate to pay the IHT!

[back_in_the_game]

Exactly. Really helpful and reassuring to have a few people make the same move for the same reasons.

I will probably hold back until I retire (hopefully within a year), but then move everything at once.

I thought about AJ Bell at 0.25% for the first £250k then 0.1% for the next £250k, but it’s still not cheap and then there are dealing fees.

I think II is the best bet (unless they get subsumed, as many do in this crazy pension world!).

Tony

[PaulM]

Yep, II have already been thru this loop a few times As per @Jamiewednesday & his reply, there are others on the forum with a lot of experience in this field and a quick search might take you to some other related topics.

[badger1963]

I too am a HL customer and my experience historically has been they will negotiate on fees, but it depends on how much you have on their platform. I currently pay less than the 0.35% fee. Worth amalgamating between spouses to increase your negotiating power. @Jamiewednesday knows loads more about platforms than I do, so well worth digesting his posts.

[Count.d]

I use three different investment/pension platforms.

Scottish widows - cheap fees, but really limited poor customer service and next to uesless website.

Interactive Investor - very cheap if you have larger sums of investment. Good app, but limited customer service.

Hargreaves Lansdown - excellent app, website and customer service, but expensive.

Don’t underestimate customer service. 99% of the time you might not need it, but when you do, it becomes very important, depending of what you’re doing. In the investment/pension world, there’s a lot of legal gobbledygook that can literally make no sense and even poor customer services don’t understand it.

Just another point. I transferred a pension into Hargreaves L about 8 years ago. The funds were sold as I requested, but then it took nearly 3 weeks for the money to go into my chosen funds with HL. During that 3 weeks, the markets rose by about 8% and it added up to a big loss. I looked into the legal T&C and they had the right, but I thought I’d send them an email complaining about this and showing them the loss I have made. I thought it was a complete waste of time, but to my amazement, I received a reply and they agreed. They paid the full loss into HL account within a week. Very odd and quite unbelievable. Just bear in mind that you could lose or benefit if you’re transferring a lot.

[back_in_the_game]

Thanks Jamie, I will look at Fidelity too.

I assume you are a financial adviser - I am too, but I only deal with UHNW clients, so I know next to nothing about low cost/execution only platforms, which is what I am looking for with my own funds.

Thanks, I’ll get some research done.

Tony