Platform Hubwise has halved the cost of its SIPP plan, it says, and has reduced entry costs as the company’s chief executive lambasts 'unfair' high charges he claims are prevalent in the sector.

The new combined platform and SIPP fee from Hubwise - which calls itself a wrap platform developed by financial advisers for financial advisers - will be capped at 30bps. A £200,000 portfolio, for example, would mean a 23bps fee and at £600,000, this would fall to 9bps.

The maximum fee for platform and SIPP plans will be £540 per annum (Hubwise’s maximum fee comprises a £480 capped platform fee plus a capped SIPP wrapper fee of £60 (inclusive of VAT). Advisers can also select their choice of DFM and have access to a whole-of-market, multi-asset class investment universe.

Hubwise chief executive Angus Macdonald claimed that the SIPP market was still charging using an “unfair model”, which saw clients with small pension pots paying a far higher percentage than those with larger holdings. This is despite the fact that small portfolios carry less risk, impose lower capital requirements and, typically, require less administration, says the company.

He said: “At the worst end of the market you have got platforms charging 4.6% on a £20,000 mixed-wrapper portfolio. Essentially, SIPP providers are using the smaller pots with lower capital requirements and higher percentage fees to subsidise the larger pension pots. This is inherently unfair to the client and doesn’t meet the needs of the modern, conscientious, activity-based adviser.”

Hubwise says it has been searching for a SIPP provider to work with for some time in order to facilitate a flatter pricing model across the board, regardless of the client’s total portfolio. The SIPP provider being used is Hartley SAS.

Mr Macdonald said: “We’ve talked with many SIPP providers over the years and have been met with significant resistance to change. We have found it very difficult to find an organisation with the same values as Hubwise. Finally, we’ve been able to secure an offering that works for us, for our users and for their clients.”

Hubwise’s new pension offering will see the charge on a £20,000 mixed-wrapper portfolio fall to 0.3% from 0.68%.

The company is planning several additional products in the coming months.

• Editor's Note: Story updated 05.10.17 to add name of Sipp provider being used.