Tilney clients face ‘a difficult decision’ after the investment management company slapped on a £100 annual fee to cover Sipp admin costs.
Jason Hollands, managing director of the business development and communications department, said clients ‘must come to a view’ about the decision to implement the admin fee from next month.
The changes relate specifically to the Best Sipp, which is available through Bestinvest, Tilney’s online investment service for non-advised clients.
Clients were informed last week. No other changes to Tilney’s fees are being made.
Hollands said he does not know whether clients will leave, but he defended the competitiveness of Tilney’s fees.
He argued: ‘It’s a difficult decision to make. Overall the charges are competitive, but obviously people will need to take a view on the fixed fee on small accounts.
‘This is the only change to our fees we’ve made. Sipp account fees have always had a lower fee than ISAs. Admin costs are higher because of the Sipp admin fee. We believe the Best Sipp fees remain very competitive.’
The Sipp has a fee of 0.3% per annum for up to £250,000, going down to 0.2% for accounts between £250,000 and £1 million.
Hollands added: ‘This is competitive and is also lower than our ISA account starting tier of 0.4%.’
Similar to Tilney, Charles Stanley also charges £100 + VAT on its Sipp.
However, Charles Stanley says it will waive the charge if a client has combined assets exceeding £30,000.
In contrast, Royal London’s Ascentric said that it does not charge an administration fee on Sipp products, with its platform charge taking into account the cost of running a Sipp.
Earlier this month Tilney posted its full-year numbers, which showed that despite generating £226.5 million in revenue, it suffered a £9.5 million pre-tax loss in 2017.