Self-invested pension provider Hornbuckle could be an exception in the self-invested personal pension market over a charge levied on clients seeking to change the financial adviser attached to their policy.
According to the firm’s full Sipp fee schedule, the change of adviser and/or adviser details during the administration cycle of a scheme will cost £50 per change, payable in advance.
Patrick Van de Steen, managing director for proposition and marketing, explained that they have a thorough due-diligence process to understand partner intermediaries, which helps to ensure any adviser is correctly permissioned for the business they introduce.
“We have full transparency on fees: the cost for changing adviser, as with all other costs, is clearly laid out on our fee card, with no hidden charges. Clients and advisers are therefore informed on the full range of costs associated with the administration of their pension.”
On the issue of adviser changes, nine of Hornbuckle’s peers spoken to by FTAdviser said they do not levy a similar charge, including Parmenion, AJ Bell Investcentre, Suffolk Life and Barnett Waddingham.
John Fox, director of Liberty Sipp, said that he had never come across such a fee before and was surprised it had been levied upon clients.
“I can imagine that there may be some providers with a penchant for charging their clients an hourly rate who may indulge in such a practice. But if you charge a client for such a simple and often crucial event, where do you stop?”
Claire Trott, head of technical support at Talbot and Muir, also expressed surprise, noting that her firm conducts due diligence and establish introducer agreements with advisers for new cases or to take over existing ones without applying a charge.
“We feel this is our duty as a scheme administrator so we are fully aware who we are dealing with, what the company permissions are and that they are regulated appropriately.
“I do not feel there should be a charge for changing advisers on a scheme, even if they have not provided any recommendations before. The work involved in checking the advisers details are as much for our peace of mind as it is any regulatory reason.”
Andy Bowsher, director of self invested pensions at Xafinity, pointed out that there is a little extra work involved in changing an adviser so it comes under the firm’s annual fees.
“To charge both an annual and an explicit fee for this kind of task would, as far as I know, not be industry practice.”
Robert Graves, head of pensions technical services at Rowanmoor, agreed that as it happens relatively infrequently, it is not something for which the firm feels the need to have a specific charge.
Martin Tilley, director of technical services at Dentons, also confirmed they had no such charge, but did point out that he has seen examples of new advisers needing to be brought up to speed with copies of previous reviews, valuations, existing nominations, etc, for their client.
“If they do, then this is recorded for the secretarial time, but would probably be nominal at perhaps £25.”
This is not the first time Hornbuckle has been taken to task over its fees. The provider was also shown to have one the highest costs when FTAdviser undertook an industry-wide survey of Sipp transfer fees.
The firm has been undergoing a major overhaul of its services in an effort to simplify processes and recently told FTAdviser it believes its aggregated charges are now 40-60 per cent below the average across the industry.
peter.walker@ft.com
