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Hargreaves Lansdown SIPP more competitive?

Retirement | SIPP Helpful? 13

Asked by claireconifers, submitted 30 September 2012.

Open Quote Now Hargreaves Lansdown are introducing loyalty commission rebates on ther SIPP, do they move up your low cost SIPP comparison table for funds?
End Quote

Answered by Justin on 01 October 2012

Hargreaves Lansdown (HL) has confirmed it will commence loyalty payments on its Vantage SIPP from 1 January 2013. This is good news for loyal HL customers, but won't be a game changer for those seeking the cheapest SIPP deals - as HL's rebates are not very generous. It's also disappointing that HL won't commence rebates for three months following the commencement - over which time HL will keep around £1.5 million that would otherwise be rebated.

I'll update my low cost SIPP comparison nearer the time, but in terms of overall cost I'd expect HL to get a bit closer to Bestinvest - who tend to give higher rebates than HL but still lag the very cheapest.

In its favour HL doesn't charge for a SIPP wrapper, but does charge £1 or £2 a month per fund that doesn't pay trail commission and a 0.5% annual charge on shares (capped at £200 a year), which includes investment trusts and ETFs.

Bottom line, even with rebates HL will still likely be well off the pace in terms of net overall cost for larger pension funds, but may suit investors with smaller pension pots where competitor annual fees can become relatively expensive.

HL also makes much of its service, which seems to receive generally good feedback. Whether this is worth paying for is obviously a personal choice

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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