Reasons not to merge two SIPPs with same provider

[sackofspuds]

I had a SIPP with Alliance Trust Savings some years ago and, as everyone knows, Interactive Investor acquired them.

I think I already had a SIPP with II so I ended up with two SIPPs with II. Different account numbers, one set of fees and the two accounts are linked to my login.

Each have circa £200k in them. I do not intend retiring for 7 years.

It would be easier for me if they were merged. It's a pain having differing amounts of cash in each one and there is the odd bit of overlap in terms of shares held in each. However, the inconvenience is not exactly insurmountable.

II tell me they should be able to merge them because neither are crystallised.

Are there any disadvantages to merging them?

[paulnumbers]

You're way way over the FSCS limit, if that concerns you. It doesn't seem to concern most people.

[Dod101]

You're way way over the FSCS limit, if that concerns you. It doesn't seem to concern most people.

I should think very many people are. I certainly am. If it matters, does the FSCS limit apply per SIPP (or for that matter per ISA) or per provider?

He is over the limit anyway so I do not see that as being relevant to the op's question. I think there is no disadvantage to merging the SIPPs and I did just that with my ISAs in exactly the same circumstances. It provides more flexibility with investments. In his Letter of Wishes (hopefully the op has one) if he have more than one beneficiary he can leave a SIPP to be held in equal or any other proportion he wishes between one or several beneficiaries so no disadvantage there in merging them either.

Dod

[JohnB]

FSCS compensation against fraud is based on the parent organisation, so that's many different brokers for Lloyds. Brokers operate an escrow policy, as do fund managers, so apart from the short term worry about accessing your money if something goes wrong, I'd not worry.

I'd merge the SIPPs.

[Newroad]

Hi SackOfSpuds.

I can see no disadvantages, only advantages, in merging them within II, e.g. You would get a single view of all your investments with the X-Ray tool.

On the FSCS question, that is a compensation limited, not an investment limit - so you would have to lose more than £85K of your c£400K for that to be an issue. More likely, in the event of a problem, it would be delayed access that would be the issue. If you have a wife/partner, it would be slightly better for the second SIPP to be in their name, but few would be prepared to go to the lengths needed to do this (e.g.divorce).

Regards, Newroad

[paulnumbers]

>If it matters, does the FSCS limit apply per SIPP (or for that matter per ISA) or per provider?

It applies per SIPP, unless the problem was a fund manager problem and you're invested in the same fund manager in both SIPPs. So it matters in as much as if one SIPP vanishes completely, you've only lost half your money minus £85k rather than all your money minus £85k.

Whether you consider this a likely realistic outcome is for another discussion, but it is nevertheless a disadvantage of putting all your eggs in one SIPP.

[AsleepInYorkshire]

A SIPP is a pension.

I must be mistaken as I thought the SIPP itself is protected if the provider goes out of business? Your funds in your SIPP are ringfenced and cannot be used by the provider.

https://www.fscs.org.uk/check/pension-p ... n-checker/

AiY(D)

[mc2fool]

A SIPP is a pension.

I must be mistaken as I thought the SIPP itself is protected if the provider goes out of business? Your funds in your SIPP are ringfenced and cannot be used by the provider.

https://www.fscs.org.uk/check/pension-p ... n-checker/

AiY(D)

Your funds in your SIPP should be ringfenced. I can't recall of a SIPP failure reported on these boards (or, indeed of one not) but in a couple of cases of general broker failures -- where also your assets should be ringfenced -- the FSCS have had to cough and clients with losses of more than the limit have lost out 'cos, due to broker fraud and/or incompetence and/or procedural/system failure, the administrator couldn't match up the broker's records, the clients' records and the actual assets found.

[wanderer]

Your funds in your SIPP should be ringfenced. I can't recall of a SIPP failure reported on these boards (or, indeed of one not) but in a couple of cases of general broker failures -- where also your assets should be ringfenced -- the FSCS have had to cough and clients with losses of more than the limit have lost out 'cos, due to broker fraud and/or incompetence and/or procedural/system failure, the administrator couldn't match up the broker's records, the clients' records and the actual assets found.

Failure to ringfence client assets happens, even with relatively well known names:
https://www.lemonfool.co.uk/viewtopic.php?f=26&t=26937

I often mull combining two SIPPs in order to save charges. If I were to do it then I would follow the example of another poster on this forum who concluded that using a high street name like Halifax would probably give you a better chance of a government bail out in the event of a failure rather than some obscure broker the press had never heard of.

[kempiejon]

I have considered opening a new SIPP account, I currently have one with Hargreaves and Lansdown. I hold ISAs with Halifax, AJ Bell and now iWeb. The idea of another provider is not to protect from fraud or collapse of a provider but more a technical hiccup. We do hear of banking services being interrupted for a few days, I think these have been due to errors rather than malice.I'd hope it's not a likely threat but losing access to my pension or ISA investment even for a short period will be a worry. If, on pay day, something were to go awry and my cash flow was interrupted perhaps with a 2nd provider I'd only be caught out with a portion of my income.

[hiriskpaul]

Merge them. You will regret it later if you don't. If you get over the LTA limit you will find having 2 SIPPs even more inconvenient.

To mitigate against a broker going bust or screwing up their operations, download your statements when available and keep all of them.

ps I would endorse what someone else said about the choice of broker when it comes to SIPPs. Big boys only, II now are big enough, otherwise HL or AJ Bell. One of the Halifax branded ones is ok as well due to the fact they are owned by Lloyds Banking Group. Avoid startups with fancy apps unless the account is within the FSCS limit. Vanguard probably ok as well if you don't mind the limited selection of investments, but expensive compared to others once you get above £75k or so.

[stevensfo]

I have considered opening a new SIPP account, I currently have one with Hargreaves and Lansdown. I hold ISAs with Halifax, AJ Bell and now iWeb. The idea of another provider is not to protect from fraud or collapse of a provider but more a technical hiccup. We do hear of banking services being interrupted for a few days, I think these have been due to errors rather than malice.I'd hope it's not a likely threat but losing access to my pension or ISA investment even for a short period will be a worry. If, on pay day, something were to go awry and my cash flow was interrupted perhaps with a 2nd provider I'd only be caught out with a portion of my income.

But Halifax and iWeb are the same. I don't think that you're covered twice by the FSCS. They're both part of Lloyds.

Just out of interest, if iWeb has a technical hiccup, does Halifax have one as well?

If not, in this day and age, shouldn't the IT staff of the one that does have a hiccup be sacked?


Steve

[kempiejon]

I have considered opening a new SIPP account, I currently have one with Hargreaves and Lansdown. I hold ISAs with Halifax, AJ Bell and now iWeb. The idea of another provider is not to protect from fraud or collapse of a provider but more a technical hiccup. We do hear of banking services being interrupted for a few days, I think these have been due to errors rather than malice.I'd hope it's not a likely threat but losing access to my pension or ISA investment even for a short period will be a worry. If, on pay day, something were to go awry and my cash flow was interrupted perhaps with a 2nd provider I'd only be caught out with a portion of my income.

But Halifax and iWeb are the same. I don't think that you're covered twice by the FSCS. They're both part of Lloyds.

Just out of interest, if iWeb has a technical hiccup, does Halifax have one as well?

If not, in this day and age, shouldn't the IT staff of the one that does have a hiccup be sacked?


Steve

Yup, iweb and Halifax are the same parent provider but AJ Bell isn't. I'm interested to pick another SIPP who isn't HL and that might be AJB.
I picked up iweb for cost savings not FSCS protections. Using both Lloyds brands I've not paid enough attention to see if their down for maintenance timings are the same.

[stevensfo]

I have considered opening a new SIPP account, I currently have one with Hargreaves and Lansdown. I hold ISAs with Halifax, AJ Bell and now iWeb. The idea of another provider is not to protect from fraud or collapse of a provider but more a technical hiccup. We do hear of banking services being interrupted for a few days, I think these have been due to errors rather than malice.I'd hope it's not a likely threat but losing access to my pension or ISA investment even for a short period will be a worry. If, on pay day, something were to go awry and my cash flow was interrupted perhaps with a 2nd provider I'd only be caught out with a portion of my income.

But Halifax and iWeb are the same. I don't think that you're covered twice by the FSCS. They're both part of Lloyds.

Just out of interest, if iWeb has a technical hiccup, does Halifax have one as well?

If not, in this day and age, shouldn't the IT staff of the one that does have a hiccup be sacked?


Steve

Yup, iweb and Halifax are the same parent provider but AJ Bell isn't. I'm interested to pick another SIPP who isn't HL and that might be AJB.
I picked up iweb for cost savings not FSCS protections. Using both Lloyds brands I've not paid enough attention to see if their down for maintenance timings are the same.

Maybe look at ii as well. I never understood why they don't advertise more the fact that the monthly fee can be used as trading credit. i.e. as well as the monthly cheap regular investing days (that they all have) the monthly fee is available to fund transactions, if used within a few months.

Makes it quite convenient when some holdings aren't available in the Regular Investing program.

Steve