Platform Hubwise has halved the cost of its pension administration service.
The new combined platform and self-invested personal pension fee from Hubwise will never be more than 30 basis points.
A £200,000 portfolio, for example, would mean a 23 basis points fee and at £600,000, this would fall further to 9 basis points; with the maximum fee for platform and Sipp never exceeding £540 a year.
Sipp providers are using the smaller pots with lower capital requirements and higher percentage fees to subsidise the larger pension pots.Angus MacdonaldAngus Macdonald, chief executive of Hubwise, said the Sipp market is still charging using an unfair model, which saw clients with small pension pots paying a far greater percentage than those with larger holdings.
He said this is despite the fact that small portfolios carry less risk, impose lower capital requirements and, typically, require less administration.
Mr Macdonald said: "At the worst end of the market you have got platforms charging 4.6 per cent on a £20,000 mixed-wrapper portfolio.
"Essentially, Sipp providers are using the smaller pots with lower capital requirements and higher percentage fees to subsidise the larger pension pots.
"This is inherently unfair to the client and doesn’t meet the needs of the modern, conscientious, activity-based adviser."
Chris Daems, director of Cervello Financial Planning, said price is certainly a factor when considering client needs however the reality is there are numerous other factors to highlight when making an appropriate selection.
He said: "So while I applaud Hubwise for highlighting the impact of costs on consumers portfolios it is also important not to lose sight of the importance of other factors like service, flexibility and financial strength as well as meeting the specific needs of the clients."
emma.hughes@ft.com
