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James Hay abolishes commission on Sipps

by William Robins on Apr 07, 2011 at 12:02

James Hay abolishes commission on Sipps

James Hay Partnership has removed commission from its Sipps in line with adviser charging rules.

James Hay will allow advisers using its iSIPP platform to choose their own charging options, with payments made from client cash accounts.

Chris Smeaton (pictured) head of product development at James Hay said: ‘With the retail distribution review in mind we have genuinely abolished all commission, together with any fund transaction charges to make our iSIPP one of the most competitive on the market today. This will be the way all fund supermarkets are likely to go in the future.’

The  iSIPP’s Investment Centre platform includes 1,800 commission-free funds as well as trading tools, a next day fund switching service and online reporting.It also includes a Selftrade online trader service, a panel of five discretionary investment managers and cash deposit accounts.

8 comments so far. Why not have your say?

Sean Kelly

Apr 07, 2011 at 12:27

It isn't called commission so it isn't commission - laughable isn't it.

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Andrew Baker

Apr 07, 2011 at 13:03

I think the idea is that clients see the price that they pay: but as that has been telegraphed to them through KFD and similar for so many years, one wonders what additional advantage changing the name from commission to fee is going to have. Personally I prefer fees because I get remunerated even when and especially when no changes in investments is necessary. Hey, hum: there's nought so queer as folk.

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Christopher Petrie

Apr 07, 2011 at 14:28

There is a very big difference, and that of course is what RDR is all about. As the article says, all fees in the James Hay SIPP will in future be paid "from the clients cash account".

That means - transparent, clear and not hidden from within AMC's, allocation rates, surrender penalties and all the other myriad of methods some providers have dreamt up over the years to help some advisers hide their charges from their clients.

Ongoing advice fees can be turned off by the client, and save them money, if they feel the ongoing advice isn't worth it. Under Fund Based Renewal Commission (FBRC) it can't usually be turned off, and if it can - the rebate goes to the provider not the client.

This - like the RDR - is indeed a significant change!

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Green Eyed Monster

Apr 07, 2011 at 15:28

Great point Christopher!

Now of course we have major problem. The client stops payment, effectively becoing an ex-client. However the adviser's liability for that advice continues for the client' s lifetime, and the renewal/trail he had been receiving - to pay the PI premium - ceases. How is he to pay the premium to protect the client?

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300311

Apr 07, 2011 at 16:49

He should have priced the cost of that into the initial advice.

The ongoing payments must be for ongoing advice, not the initial advice.

So no problem!

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Anitaki

Apr 07, 2011 at 16:59

FEE fi fo fum - I smell the VAT man about to come

Easier to collect VAT on fees than on commission

Watch this space through the smoke and mirrors

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Green Eyed Monster

Apr 07, 2011 at 18:15

To 300311.

Fair point!

Now how would you go about pricing the cost of PI into say a £10,000 ISA for a 35 year old, who can be expected to live to 85?

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Philip Adams

Apr 11, 2011 at 10:28

Am i right in thinking that if clients are paying fees from a cash account rather than commission from their pension funds then they are potentially paying up to twice as much for their advice (50% taxpayer), as they are now paying from cash and not from their tax relieved pension funds assuming the commission/fee cost remains the same?

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