Type: Full Sipp
Minimum investment: Lump sum £50
Investment choice: Cash only option – cash deposits, cash plus option ¬ cash deposits plus investment funds with a single management group, complete option – full range of permitted investments including Oeics, unit trusts, investment trusts, shares, gilts, insurance company bonds and commercial property
Options: Cash only, cash plus, complete Sipp
Charges: Cash-only option – 1% administration fee subject to a £5 minimum. cash-plus option -1% administration fee, annual management charge £250, complete Sipp option – set up fee £350 but waived if moving from cash-only or cash-plus plans that have been held for six months, annual £450, transfers in £50, additional caost for property, set-up fee £95 and annual £95 once benefits are taken
Tel: 0870 567 3319
The Lifetime Sipp from Hartley SAS provides three investment option levels ranging from cash only to full self-investment.
Informed Choice director Martin Bamford says the design of this product recognises that not every investor has sufficient pension assets to warrant the use, and cost, of a full Sipp.
He thinks the ability to start this Sipp as a cash-only product with no set up charge or annual fee reflects the need that many clients have to get a Sipp started with regular cash investments. “You can then upgrade to the cash-plus option which has a single investment manager, or a complete Sipp with a wide range of investment choice without having to pay a set-up fee, assuming that the cash-only Sipp has run for at least six months,” he says.
Bamford regards the charges as clear and competitive, with an easy to understand product structure that can be explained to clients without the need for complex diagrams and lengthy discussions.
However, he points out that whether or not a Sipp makes the grade is more a case of service and investment flexibility than charges. “A good value Sipp will be one that can be easily managed, will allow the client to access the investments they choose and will report accurately and on time.”
Discussing the potential drawbacks of the product Bamford says: “For the lower end of the Sipp market this product is still relatively expensive, even for the cash-plus product. Taking an example of an investor contributing £50 a month, they would see 10 per cent of this contribution taken as an administration fee as a result of the minimum charge. This product would represent much better value for someone investing bigger contributions.”
Bamford would prefer to see the administration charge on the cash-only and cash-plus versions expressed as an explicit fee rather than a percentage.
Competition, in Bamford’s view, will come from stakeholder and low-cost personal pensions for people in the early build-up phase of their pension plans.
“The competition for this product will depend upon the aims of the investor. Sipps are now really falling into three categories and all of these will provide competition. These are the provider Sipps – essentially a fund supermarket personal pension with full Sipp options, full Sipps from trustee firms like Hornbuckle Mitchell and Pointon York, and cheap Sipps that are often administered online, with some investment restrictions,” says Bamford.
He concludes: “For somebody building up cash reserves before going for full self-investment, it would probably make more sense to opt for a stakeholder or personal pension with lower charges for access to a wider range of asset classes at lower charges.”
Suitability to market: Good
Adviser remuneration: Average