Changes to our charges – August 2017

Some of the charges applicable to the James Hay Wrap and Select SIPP will be changing with effect from 7 August 2017. If you are affected by this change you will have been informed in writing.

We have seen the operational and regulatory costs of providing our administration services continue to increase, for example, following the introduction of pension freedoms in 2015. In addition, when bank interest rates were higher we were able to keep our product administration charges lower by retaining an element of interest paid by banks from cash held within our products, in accordance with the product terms and conditions. However, the current low interest environment, which we expect to remain for the foreseeable future, prevents us from being able to continue this approach to the same extent.

We need to respond to these challenges, ensuring we can continue to look after your products for the long term and enable a sustainable level of future investment to improve the service we offer to you. This ongoing investment in people, technology and service is therefore critical and whilst we acknowledge any increase in charges will be unwelcome, we are confident this is the right thing to do.

Please refer to your notification letter and the enclosed charges schedule for confirmation of the charges that are changing or being introduced.

The changes to charges will be introduced on 7 August 2017. The frequency and timings of when the charges will be taken are detailed in your charges schedule (enclosed with your notification letter). All charges will be deducted from your product bank account.

It is important that you:

• Read through the notification letter and the enclosed charges schedule.
• Read all of these questions and answers.
• Consider whether the changes we are making will result in your current product continuing to meet your needs.
• Consider with your financial adviser:
• keeping your current product, accepting the new charges and terms, or
• moving to a provider(s) other than James Hay as this may be more appropriate for you.

You can find more information on our literature page but please speak to your financial adviser to discuss the best option for you and your circumstances.

If you have not received a letter by 30 June 2017, please contact us on 03333 202 733 and we will confirm if you are impacted by the changes and if you are, provide you with a copy of the letter.

Once these changes have been made we have no current plans to increase our charges again in the near future. However, there are some external factors, which we cannot control that can have an effect on the charges we apply. For example, future changes in regulation may increase the amount of work we are required to carry out and, therefore, it may be necessary to adjust our charges. If this happens we will notify you in advance of any further changes. Please note that charges not expressed as a percentage will increase on 6 April each year in line with the Average Weekly Earnings Index (see below for further details).

The Average Weekly Earnings Index reflects the average change in the level of wages in the UK over time.

Most of our costs are linked to staff wages, which tend to rise over time, in common with wages nationally (the latter of which is measured using the Average Weekly Earnings index, or AWE). Linking our charges to AWE means we do not need to make periodic increases in order to realign our charges with costs after they’ve risen, which could be difficult for customers to anticipate. We believe that customers can plan their finances with more confidence if we explain how our charges are expected to increase in the years to come.

James Hay is still required to report on the operation of the property. This includes reviewing bank account transactions to ensure compliance with the regulations and tax rules, carrying out periodic regulatory reporting, providing ad-hoc guidance on property issues, administering expenses, fees and third party invoices as well as allocating rental income.

James Hay has a panel of preferred solicitors where we have developed efficient processes to support property transactions. Other solicitors often require significantly more support from James Hay because they are unfamiliar with James Hay’s requirements and the specialist work involved in commercial property SIPP transactions. They may themselves incur higher costs owing to this lack of familiarity.

More information can be found here.

Following changes to the interest James Hay receives from its banking partners we can no longer link interest rates directly with the Bank of England’s base rate.

We publish our rates of interest on our bank account page.

A key element of these changes will be to enable us to invest in people, technology and services to ensure James Hay is a viable and healthy business for now and for the future. We have already put in place an extensive customer service and operational efficiency programme which aims to highlight the areas in which we need to improve to enable us to provide a better service for our customers.

Yes, we have already informed your adviser of the changes we are making.

Yes. If you wish to transfer to another provider(s), you should speak to your financial adviser in the first instance. We have also produced a guide to transferring SIPP products away from James Hay Partnership which you can access here.

If you notify us that you wish to transfer out within 120 days of receipt of this letter we will waive our standard transfer out charge as well as any additional product charges incurred as a result of these pricing changes. If you hold a property, we will waive the property transfer out charge if you use a solicitor on our panel. However, there will be other costs associated with transferring a property for which you will be liable. Your new provider(s) may also charge you their standard costs for opening a product with them and transferring in your investments.

We would normally expect the transfer to take between 8 and 14 weeks but this may take longer if the assets you hold are considered ‘non-standard’ or if there are any delays by third parties which are outside of our control.