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Simple Sipp

JAMES HAYJames Hay E-SippType: Online self-invested personal pensionMinimum investment: No minimumInvestment choice: Collect Fund Range – 366 funds from Aberdeen, Allianz Dresdner, Artemis, Baillie Gifford, Baring Asset Management, Britannic, DWS, Fid-elity, First State, Framlington, Henderson, Invesco Perpetual, Investec, JP Morgan Fleming, Lazard, Liontrust, Prudential M&G, Mellon, Merrill Lynch, New Star, Norwich Union, Old Mutual, Schroders, SG Asset Management and Standard Life Investments. Select Fund Range – 160 funds from Aberdeen, Axa, Baillie Gifford, Clerical Medical, Invesco, Mellon, Merrill Lynch, Morely, Neptune, Prudential M&G, Standard Life, stocks and shares through Abbey sharedealing serviceCharges: Transaction-based – collect funds initial up to 5.5%, annual 0.3-1.75%, select funds annual 0.75%, transaction-based charges – transfer in £50, regular payment set up £50, single ad hoc contribution £50, Abbey sharedealing service £50 each trade, income withdrawal £150 a year, annuity purchase £50, transfer out £50Commission: Refer to James HayContact: Hay’s e-Sipp is an online Sipp with a transaction-based charging structure. It provides access to a range of investment funds and individual shares through the Abbey sharedealing service but has no facility for investing in commercial property.

Informed Choice director Martin Bamford says: “This Sipp will appeal to less sophisticated investors who are looking for a cheap and simple product. The nil cost for set-up and no annual charge are extremely competitive. If an investor is not planning to switch funds on a regular basis, this product will prove to be very cost-effective, especially for bigger funds.”

Bamford particularly likes the literature that James Hay has produced for this Sipp. He says: “The explanatory booklet is very easy to read and it will help to ensure that clients fully understand the product and associated rules.”

Considering the less appealing aspects of the Sipp, Bamford says: “This will not appeal to more sophisticated investors including those who would like to invest in property. When the investment rules are relaxed in 2006, this Sipp will look very restrictive.”

Bamford also complains that the range of “select” funds does not offer much in the way of a discount to the initial or annual charge and adds: “Online investment in these funds is not currently available.”

Considering which providers will compete with James Hay in this market, Bamford says: “There are a number of online Sipps available that compete on price. Sippdeal was the first online Sipp in the UK and remains an extremely competitive product for this particular market.”

Summing up Bamford says: “The ability to monitor the investments through the James Hay Online service has both advantages and disadvantages. While it might encourage clients to take a more active interest in their pension, it could also lead to kneejerk reactions to changes in fund values. This may prevent the client from taking a longer-term view.”

BROKER RATINGSSuitability to the market: AverageFlexibility: PoorCharges: GoodAdviser remuneration: AverageOverall 7/10



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