FTAdviser spoke to 14 self invested personal pension operators to gauge the range of costs when transferring in and out of a Sipp, following industry concerns.
Last month, Sipp providers highlighted frustration over some firms’ charges to transfer out, which they claimed are so high - and have been recently hiked - to discourage clients from transferring out of their existing scheme.
Dentons Pensions’ director of technical services Martin Tilley and Greg Kingston, head of marketing and proposition for Suffolk Life, in particular highlighted instances where the costs to transfer out were higher than to transfer in.
Mr Tilley said: “Costs are lower to bring assets on than to move them off - that cannot be right can it?”
Mr Kingston even suggested there may be breaches of Treating Customers Fairly principle six, which states that customers should not “face unreasonable post-sale barriers... to change product [or] switch provider”, in cases where associated fees take costs “into the thousands of pounds”.
The table below shows the costs for surveyed providers, covering most of the larger players in the sector, to transfer out standard assets and commercial property.
| Provider | Transfer in (per holding) | Transfer out | Comm property in | Comm property out |
| Aegon | Free | Free | N/A | N/A |
| AJ Bell | Varies | Varies | £750 | £400 |
| ATS | £50 plus VAT | £150-£200 | N/A | N/A |
| Aviva | Free | Free | £1,450 (service provided by Suffolk Life) | £600 (service provided by Suffolk Life) |
| Barnet Waddingham | Time-cost basis | Time-cost basis | Time-cost basis | Time-cost basis |
| Dentons | Time-cost basis | Time-cost basis | Time-cost basis | Time-cost basis |
| Fidelity | Free | Free | N/A | N/A |
| Hornbuckle Mitchell | £150 | £95-£250 | £500 | £800 |
| James Hay | £50 to a maximum of £200 per annum | £150 cap | £600-£800 | £450-£650 |
| Liberty | £50 | £50 | £450 | £250 |
| LV= | Free | Free | £1,334 | £328 |
| Scottish Widows | Free | Free | N/A | N/A |
| Standard Life | One-off charge of £265 | A maximum of £350 per year | £728 | £617 |
| Suffolk Life | £150 | £150 | £1,450 | £600 |
Source: FTAdviser research. All costs are per holding, unless it says otherwise.
In the case of four firms - Alliance Trust Savings, Hornbuckle Mitchell, James Hay Partnership, Standard Life - costs to transfer out standard assets either are or are likely to be higher than to transfer in.
In contrast, five firms do not charge anything to transfer a standard asset in or out: Aegon, Aviva, LV, Fidelity and Scottish Widows. Of the remaining four firms, two charge the same to transfer in as to transfer out: Liberty Sipp (£50) and Suffolk Life (£150).
Three more have variable fees based on time-cost basis charges: AJ Bell, Barnett Waddingham and Dentons.
These charges can still be considerable: Dentons for example charges an hourly rate for administration at £100 plus VAT. Mr Tilley said total time taken for most transfers will be less than five fours.
Barnett Waddingham said it was likely transfer out costs would be higher than those to transfer in due to additional administrative work needed to ensure the next Sipp provider can rely on information provided “at face value”.
Where commercial property is concerned, costs are higher due to greater complexity involved but still vary considerably. Charges per asset range from £450 to £1,450 to transfer in and £250 to £800 to transfer out.
Only one firm charges more to transfer commercial property out than to transfer it in: Hornbuckle Mitchell, which levies the highest fee of the sample of £800 to move an asset off platform, not including valuation or other fees, far more than the £500 to transfer in.
Hornbuckle is also likely to charge more to transfer the same standard asset out as in, with per asset costs ranging as high as £250, making it again the most expensive.
Mark Canning, Hornbuckle Mitchell’s head of proposition, said: “The higher charges for transferring out reflect the additional work required to wind up the scheme and meet the varied and differing requirements of the receiving provider.
“As a scheme transfers away we have less control over the receiving schemes requirements and processes. We would welcome a greater degree of consistency on transfer business across the industry ideally to help standardise prices and ultimately improve the client experience/outcomes.”
Of the remaining nine firms in the sample that support commercial property investments, fees range from a low of £250 with Liberty Sipp and £328 with LV, which in the case of the latter is less than a quarter of the £1,334 transfer in fee.
Two firms - Barnett Waddingham and Dentons - charge for commercial property on a time-cost basis.
Another area where there is considerable disparity is in transfers of cash holdings, which are not considered a standard asset by some firms. Charges ranged from zero to a high of £250 and £255 with Dentons and Barnett Waddingham respectively.
