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Switching isn’t easy but it could result in a more fruitful investment experience
Thursday 01 Mar 2018 Author: Emily Perryman

If you’re unhappy with the fees or customer service at your current SIPP (self-invested personal pension) provider then it could be worth transferring to a new provider.

SIPPs vary significantly in what they offer, so you need to do your homework when deciding with whom to place your hard-earned pension money.



It’s easy to accept the status quo and not bother changing providers, but you could lose out in the long run.

Excessive SIPP fees will eat into your returns.

‘The power of compounding means that transferring to a lower-cost SIPP provider can give a huge boost to the value of your SIPP over time as you get to keep more of your investment returns,’ explains Charlene Young, technical resources consultant at SIPP provider AJ Bell.

You might also be disappointed with the range of investments you’re able to access though your SIPP or fed up with bad customer service. Poor technical support, errors and a slow response to questions can be a major irritant.


Transferring a SIPP is easy in theory – you just need to contact your new provider and they’ll start the process. Unfortunately, the time it takes to transfer can vary enormously.

A ‘cash only’ transfer should take a couple of weeks, although it’ll be slower if both providers aren’t signed up to a transfer platform like Origo Options.

Some industry experts estimate it should take three to four weeks, although it can be faster or much slower.

If you choose to transfer ‘in-specie’ – where your investments are maintained and transferred to the new provider – it can take around two to three months for the process to complete.


Your current SIPP provider is likely to charge you an exit fee when you transfer out – typically around £100.

If you transfer in-specie, you’ll also have to pay for each individual investment holding to be transferred over. The average is £25 per holding, meaning you’d pay an additional £250 for a portfolio of 10 investments.

Similarly, selling individual equity holdings in order to facilitate a cash transfer can cost between £10 and £25 per line of stock.

The advantage of transferring your investments in-specie is that it protects you from market movements. With a cash transfer you have to buy your investments back again – potentially at a higher price.

Jeff Steedman from pensions administration firm Xafinity says transfer fees can often act as a barrier to people switching provider, even when they’re unhappy.

‘A SIPP is for life and, if you’re not happy with your provider, it is often worth putting in the energy and dealing with any costs to move – to ensure you’re in the hands of a provider that will genuinely look after you in the long-term,’ he says.


It’s extremely important to compare the different fees charged by SIPP providers.

The main one to look at is the ‘custody’ or ‘administration’ fee. This will be charged on either a fixed-fee basis or as a percentage of your portfolio.

According to Steven Nelson, head of research at The Lang Cat, a financial consultancy, once you have a portfolio worth in excess of £100,000 then a fixed fee platform will start to work out cheaper.

Platforms also levy trading fees, so it’s worth thinking about how often you buy and sell investments when choosing a SIPP.

Trading equities (shares, investment trusts and exchange-traded funds) is usually more expensive than trading funds, although the custody fees for equity-based investments are often capped.

Fees aren’t the be-all and end-all. Nelson says one of the biggest factors to consider is how much help you need picking investments.

‘Platforms vary significantly from those that simply present an open choice of thousands of investments to those that give you a hand choosing. This can be a suggested list of “best buy” investments or a range of investment funds by risk profile,’ he adds.


As well as ‘platform’ SIPPs, there are also ‘full’ SIPPs available. Full SIPPs enable you to invest in non-standard investments, the most common of which is commercial property.

Full SIPPs tend to be more expensive, so there is little point in paying for one if you only need access to a small range of funds.

However, it’s important to ensure your new SIPP offers all of the investment options you need, as they can vary.

This is particularly the case if you opt for an in-specie transfer – it’s worth double-checking that your new provider can hold your existing investments before you start the process.

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