SIPP & QROPS Fees and Commissions Explained
We list below the key QROPS fees and SIPP fees you can expect to pay, and how you can avoid being charged too much.
Many people fail to ask questions about fees, charges and commissions, nor compare QROPS fees against SIPP fees; even when they do they fail to conduct any due diligence on what they are being told.
It is important to understand that what you get back from your investments is not purely down to performance, but also the QROPS fees, charges and commissions which will start to eat into your return on investment. This could significantly reduce or eliminate any earnings on your pension funds.
The below information is designed to help you ask the right questions of any advice or adviser.
Typical SIPP and QROPS fees, charges and commission structures
Ultimately, when it comes to QROPS fees, transparency is key. The more details held within the report the better. When reviewing your report, look for the following information. If it is not in the report, then do not assume you are not being charged the fees, but simply you are not being told about them!
Trustee QROPS Fees
Basic Platform Fee or Bond charge including annual fee, admin fee, dealing costs
Bond Commission charges spread out over a typical period of 5-8 years
Initial cost any funds which should also take into account exit fees.
Ongoing charges for the underlying ETFs, Mutual Funds, etc…
Ongoing adviser charges. You should always ask questions about charges and commissions.
If a transfer is managed correctly, the QROPS fees or SIPP fees you experience should not be dissimilar to your current pension. In the case of QROPS fees you should anticipate them to be probably higher. You should not be scared to ask and investigate.
Typical expat concerns about QROPS fees
Some of the more common issues and concerns we assist clients with include:
One or more of my investments have become worthless
The adviser, who I trusted, has disappeared.
My investments are going up theoretically but the overall investment isn’t, why?
I do not understand why the charges are much higher than expected
The pension doesn’t appear to be performing as expected
I don’t think I’m being told the whole story about QROPS fees
My pension income is being reduced, or I have been told my fund will run out
If any of these apply to you, why not review your QROPS to see if you have been incorrectly advised, or if your QROPS fees are too high. It may be possible to:
• Reduce ongoing charges
• Remove the Life bond
• Review the portfolio in line with your risk
• Review if a QROPS is still appropriate for you by comparing it to a SIPP.
Avoid making the wrong decision
The right advice comes with total transparency and recommendations from regulated specialists.
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
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