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Bestinvest targets SIPP customers with ‘competitive’ new fees

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31/01/2014
Bestinvest has announced its new pricing structure, with self-invested personal pension (SIPP) investors set to benefit from lower fees.
Bestinvest targets SIPP customers with ‘competitive’ new fees

From 1 March, the UK’s sixth biggest direct investment platform will charge SIPP investors 0.3% for investments up to £250,000, reducing to 0.2% for assets between £250,000 and £1m

There will be no fees for asset balances above £1m.

ISA charges will begin at 0.4% for investments up to £250,000. There will be no initial charges or switching charges on funds and a continued flat rate dealing fee on shares of £7.50.

The new structure applies to both existing and new investments. Bestinvest will also pay up to £500 towards the cost of any exit fees for investors looking to transfer to its SIPP.

Under Bestinvest’s new structure, shares, ETFs and investment trusts will also escape the trading fees levelled by Hargreaves Lansdown, leading to “exceptional” value for money for SIPP accounts, according to Bestinvest boss Peter Hall.

Bestinvest has secured an average 0.66% charge for funds on its Premier Selection list, above both the 0.65% Hargreaves has secured for its own Wealth 150 list, and the 0.54% average for HL’s 27 “favourite” funds.

This move has made Bestinvest “the most competitive platform for mid-sized SIPP portfolios where investors hold a range of assets”, according to experts at The Platforum, an independent specialist on investment platforms.

Holly Mackay, managing director at The Platforum, said: “Bestinvest’s pricing model feels like a response to its nemesis, Hargreaves Lansdown. Presumably not blind to sophisticated investors’ outrage with the Hargreaves decision to levy separate and additional fees on investment trusts, the Bestinvest structure is very clear that no additional costs are levied depending on what sort of investment you hold.”

Mackay said that the general investment account and ISA costs are very similar to what has emerged as the new resting point for the platform market, hovering around the 0.35% per annum level, but what is notably different is the approach to SIPP charging.

She said: “A simple 0.3% fee on SIPP assets, including listed securities, and £7.50 a trade is very competitive. With no additional fixed fee for SIPP assets, this is a very clear statement of intent by Bestinvest. They want to be the go-to platform of choice for middle-England’s savers with a SIPP who have a blend of funds, shares and investment trusts.”

In recent weeks, several of the UK’s top investment platforms have announced new pricing structures.

Platform giant Hargreaves Lansdown will charge an annual fee of 0.45% for investments of up to £250,000.

Fidelity undercut Hargreaves Lansdown with its new pricing structure, introducing a platform charge of 0.35% for clients with investments of up to £250,000.

The reason behind the pricing announcements is that from April, all investment brokers and platforms will have to ‘unbundle’ their prices under new rules from the regulator aimed at making investing fairer and more transparent for the end consumer.

In real terms, this means customers will pay a ‘service fee’ to the platform as well as an annual fee on any funds held, rather than one ‘bundled’ charge as they did previously.

 

Price comparison table for 12 leading UK platforms for non-advised investors

  £10,000 £50,000 £150,000 £500,000
AJ Bell Youinvest £121 £654 £1,662 £2,695
Alliance Trust Savings £221 £805 £1,614 £2,422
AXA Self Investor £131 N/A N/A N/A
Barclays Stockbrokers £116 £579 £1,737 £3,232
Bestinvest £121 £579 £1,738 £3,608
Charles Stanley Direct £104 £642 £1,685 £2,928
Fidelity £116 £579 £1,737 N/A
Halifax Share Dealing £143 £632 £1,530 £2,338
Hargreaves Lansdown £126 £629 £1,888 £3,451
Interactive Investor £164 £664 £1,504 £2,344
TD Direct Investing £118 £738 £2,003 £3,240
The Share Centre £218 £902 £1,710 £2,518

Source: The Platforum.  

  

 

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