I was considering to transfer to IE thinking it would be cheaper. £11.99 isn’t competitive enough. My current provider not only charges cheaper fee of £119.88 per year, but also offers stocks in addition to ETF.
Disappointing re the costs for those with smaller amounts to transfer / invest.
I also don’t think £11.99 a month is competitive enough I’m afraid - I would have been tempted at a 0.10% or 0.12% fee level which would undercut a couple of the providers available at 0.15%.
£11.99 is too high for investors that were thinking of transferring only a portion of their Sipp savings (say up to £50 -75K).
I currently have an HL Sipp for some active funds & investment trusts; I also have another Sipp with Dodl (part of AJ Bell) that is primarily tracker funds, which I was thinking of transferring, but this only charges 0.15% and has free fund & share trading, so I’m better off sticking where I am.
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As someone who’s been looking forward to an IE SIPP for over a year now, I’m super disappointed by how much this costs. I get that it’s in everyone’s interest for IE to make money, but 11.99 p/m just isn’t competitive given other options I’ve seen on the market. Just off the top of my head, it’s more expensive than a yearly subscription to FreeTrade (equivalent of 9.99 p/m), and if you get a SIPP with them, why not also move your ISA too.
IE’s USP (for me anyway) was that it’s a simple and low cost platform. In my case, unless I put all my eggs in one basket and move everything over to IE, this product just isn’t going to make financial sense. Such a shame as ultimately this decision makes me a much less “sticky” customer given I’m currently only committed to one product on the platform.
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This is a bit disappointing to hear re the fee, as it’ll price out many potential current and new IE’s customers who were looking forward to SIPPs becoming available.
I’m sure they’ll still do good business, but it could’ve been much better with a cheaper monthly fee or a competitive % charge.
Obviously a big selling point is I’m assuming trades will be free like with their other accounts, what with already being charged a monthly fee. That would be great, especially for those who buy and sell regularly.
Key thing for me is - will they allow employers to contribute directly into it? Without that, they’re just like Vanguard in creating a substandard product and that would be majorly disappointing… so hope that’s not the case!..
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This has went down like a lead baloon, I was not expecting the SIPP to be free like the ISA but £11.99 a month is very steep and only an option for those with much larger pots. I’m sure you’ve done your maths but my gut says you would have much larger uptake and therefore revenue pricing this more competitively.
In honesty I do not expect the ISA to remain free forever, a flat % based fee undercutting Vanguard would seperate you from the competiton and be more sustainable in my opinion add a LISA in too and you would tick all the boxes for younger investors.
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Upon further reflection, i think this would have been the best way of doing it.
Charging a 0.12% fee would have just undercut Vanguard and attracted a lot more customers.
A flat fee structure of £11.99 is terrible for those just starting out. And making it free for the first £2000 is just rubbish. With the tax relief on SIPP contributions, you barely have to contribute anything before you reach that £2000.
Also, how does it work? £2000 and the SIPP is free, but £2001 and I pay £11.99 a month? That surely can’t be a good way of doing it.
It seems InvestEngine will only be attractive for those transferring a significant sum over from another provider. If you are just starting out with a SIPP, it should be close to last on anyone’s list.
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So disappointed. Currently have only £20k in my SIPP (as only started a SIPP 3 years ago) and was going to transfer to IE and look to grow it. But can’t justify £11.99, if it was 0.15% same as Vanguard and Dodl I’d transfer to IE as prefer the platform and fund offering. Going to be a few years until my SIPP is big enough to transfer to IE. I guess IE see their competition as Freetrade not Vanguard and matching their price.
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Would be good to have some feedback from IE on this subject as everyone so far seems disappointed by the pricing placement. What is the market strategy? Who are they targeting for this product? Who do they see as the competition?.. I think most were assuming a similar strategy as their current ISA and GIA’s and have been surprised that this does not attract the lower level investors.
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I doubt that it’s a matter of how they perceive the competition. It seems to me to be more likely that they were limited because of administration costs. It could easily be the same administrator as the Freetrade scheme (Platform One). This is just speculation though at the moment.
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Hi all,
As usual, thanks for your feedback. One of the purposes of releasing the pre-registration page was to understand if we’ve pitched the product at the right level as we get closer to the full launch, and clearly there’s some further discussion needed.
We’re really excited about bringing everything InvestEngine has to offer to the world of retirement and want that same excitement to be felt in our community, as it has been seen in the adoption of our platform as a whole.
Your views have been taken on board, and are being discussed across the business as I type, so thanks again for your interest and valued debate.
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Thanks Adam and look forward to some more news on this subject.
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I love investEngine as a company but it’s not enough for me to lose sight of common sense investing - my SIPP will stay with Vanguard until it makes financial sense to transfer it.
Whilst ISA’s and GI remain with IE since that’s the sound financial choice there.
Moving my LISA over when the time comes will of course depends on the competitiveness of the overall product offered as well.
Keep up the good work, but a swing and a miss of the face of it (appreciate there’s a ‘whole picture perspective’ that needs to be looked at beyond the customers eyes).
I have a £250k pension pot so even if it were at Dodl (it’s not - I’m paying much higher fees with an advisor), the IE offering at just £12 a month (0.05% a year) is a very attractive offer.
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I think it represents very good value when you take into consideration there are no other charges (unless an additional managed fee option is available that is) and the wide options of ETFs available. My headache is currently deciding whether to switch my current underperforming index fund to another index fund or change to ETFs, which will then dictate provider as I would go with IE if I do change it over to ETFs.
It might also depend on timing. I want to get this sorted soon. Are IE likely to open the SIPP before the end of September?
So disappointed by the IE decision to charge that much. I have a very small pension from a previous role that I wasn’t at for very long (£12k) and it’s with Nutmeg (part of Chase) and that’s about 0.75% fee. I think that’s ok for a pension I’ll only ever add to by adding pensions from jobs I come and go from.
Perhaps a staging approach could work, for example a 0.10% fee on portfolio’s under £100,000, and a flat monthly fee thereafter…or something to that effect. That could capture everyone, or at least I hope it would.
It would perhaps be pertinent to offer a wider selection or REIT ETF’s, such as the AMUNDI INDEX FTSE EPRA NAREIT GLOBAL UCITS ETF DR (I see you have the HSBC FTSE EPRA, in conjunction with the SIPP launch since this is an asset class commonly used in retirement funds.
I would also like to see a more detailed ‘costs and charges illustration’, similar to what interactive investor provide. Their ETF’s appear to have inflated fees so it would be helpful to do side by side comparisons…even if it is lots of 0’s!
Finally, more information on whether users could go into flexi-access drawdown / keep it an uncrystalised pot and make withdrawals.
Thanks for the great service, I’ve been very impressed with the ISA - long may it continue.
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+1 on the employer contributions
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I guess that is the point we are all making here. A flat fee structure of £11.99 a month is great for those witb bigger pots already, but if you are just starting out with a SIPP or have a smaller pot, InvestEngine is not competitive at all.
Another way they could do it is a percentage fee for pots below a certain threshold and then it switches to the £11.99 a month once it reaches that threshold.
That way would keep everyone happy.
I don’t know how other providers handle employer contributions, but when my SIPP was with AJ Bell, I had to fill out a form each month to state the amount and whether it was an employer’s contribution or personal.
As others have said, that’s a real shame if they go ahead with £11.99 fees. Makes it completely out of the question for a SIPP pot of my size. Even if IE could come close to matching Vanguard’s 0.15% fee, that would be compelling enough to switch
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