portfolio planner -SIPP

rochester2008

Hi

I will shortly have £100,000 invested in a Sipp with SIPPDEAL after I drawn the maximum tax-free lump sum. My intention is to take £0 income for at least several years. Between now and then, I will be taking all the investment decisons myself.

I have searched Google for portfolio planning tools to assit me. However, the Prudential, Friends Provident, Zurich and Standard Life websites require me to havea Unipass passward to access their tools. It seems Unipass is only available for IFAs.

Does anyone now where I can access a portfolio planing tool online thats free of charge / doesn't require a Unipass?

Thanks in advance.

EdInvestor

This US asset allocation tool is quite helpful for starters.

http://www.schaeffersresearch.com/personalfinance/calculators/AssetAllocator.aspx

dunstonh

I would be wary of US allocation tools. They are based on US thinking (which is generally inward looking) and US taxation.

Unipass is for IFAs only. Its a way to have a single certificate to access various provider's client data and information/tools.

purch

Unipass

---

Single

Who'd have thought.................??:rotfl: :rotfl: :rotfl:

EdInvestor

Here is a New Zeaand asset allocator for comparison.

http://www.moneyonline.co.nz/calculator/calculator.htm#calc


If you want to see a real horror example of "UK thinking" click here
and then scroll down to the AMC calculator link which goes to a Pru spreadsheet of a retirement asset allocation.This features a portfolio which is 48% invested in global equities and another 15% in UK equities.

They call this a "balanced portfolio" in the UK.

Retirees might consider whether this is what they would call it, and whether "UK thinking" - which seems to feature high charges and high risks - is really for them.

dunstonh

Retirees might consider whether this is what they would call it, and whether "UK thinking" - which seems to feature high charges and high risks - is really for them.

Portfolios should be built to match the risk profile of the individual. Risk scales from different providers vary. Some start with cash as a baseline. Some start with risk based holdings as a baseline. As long as you know the baseline and your risk profile then you should be fine. 63% equity content is fine for balanced portfolios.

The greater horror is the way you promote high risk strategies when it suits you, then jump to extreme opposites when the first option goes wrong and then pour scorn on every other option that is equally or more suitable. Especially when you pick little snippets of information, twist that to create a whole argument against an option and totally disregard everything else.

How are those high yield portfolios doing that you used to tell people to use for doing drawdown? Why arent you telling people now to use HYP and instead telling people to use cash and gilts instead?

EdInvestor

dunstonh wrote: »

How are those high yield portfolios doing that you used to tell people to use for doing drawdown? Why arent you telling people now to use HYP and instead telling people to use cash and gilts instead?

I still use the HYP, it's a great way of getting dividend income without depleting capital.I use it for the equity component My SIPP is currently worth the same as it was when I started it and I have had half that amount out of it in income over the past 6 years - my pension has almost doubled.

So I am well pleased, that performance beats an annuity into the long grass, and I still have the capital I expect that capital to start growing again soon.

The point is that you always portray drawdown as high risk, but that judgement is based on taking the highest income and using an IFA and conventional funds, which attract the highest charges.You lose 2-3% a year before you start.

But it is quite possible to adjust the level of income taken - indeed many people want the tax free cash and no income at all, in the beginning. If only low or nil income is required you can invest the plan wholly in gilts (not gilt funds) or cash and that will be safer than any annuity, while keeping the capital.

Equally if you adopt a low cost investment strategy you can take more income without depleting the fund.

dunstonh

I still use the HYP, it's a great way of getting dividend income without depleting capital.

That comment should be framed. That is so misleading and inaccurate. If you were regulated you would be looking at upheld complaints and the FSA fining you and putting you out of business.

Some time back Ed posted an example of an HYP and I inputted those details into financial express. Well, I never deleted that portfolio from the software and just took a look. It has dropped by 33.6% in the last 12 months. So, a 100k portfolio invested 12 months ago would now be worth £66,400. That is what Ed means by your capital not being depleted.

The point is that you always portray drawdown as high risk, but that judgement is based on taking the highest income and using an IFA and conventional funds, which attract the highest charges.You lose 2-3% a year before you start.

The use of an IFA makes barely any difference to overall return. A 60 year old would find around 0.1% -0.2% p.a.reduction in yield is the typical cost of advice (assming an initial charge).

The FSA treat drawdown as high risk. The FOS treat it as high risk. Ed doesnt. Who do you want to believe?

Drawdown is a transaction that has advantages and disadvantages over annuity purchase. Once you understand the pros and cons and if you feel the pros outweigh the cons then it is perfectly fine to go with it. However, you should not disregard the risks as easily as Ed does.

EdInvestor

dunstonh wrote: »

It has dropped by 33.6% in the last 12 months. So, a 100k portfolio invested 12 months ago would now be worth £66,400. That is what Ed means by your capital not being depleted.

Not quite as much as that. The HYP is the equity part of the SIPP.I don't invest my entire SIPP in shares of course, other asset classes also feature. But I repeat, after 6 years,I still have my original capital, plus an additional 50% of that amount in income over the period.If I had bought an annuity, I would have no capital,and would have received approximately 25% of the capital back in the form of income.There is no comparison whatsoever.Nor can you say that I have lost money.

The overall value of the drawdown is only important once every 5 years when it has to be revalued. The revaluation is based on several things - the value of the fund, the current 15 year gilt yield, and your age - so even if your fund has gone down, the other two criteria may balance it so that your allowable income remains stable or even goes up.

Drawdown is a transaction that has advantages and disadvantages over annuity purchase. Once you understand the pros and cons and if you feel the pros outweigh the cons then it is perfectly fine to go with it.

Quite so.People do need to understand the risks - and the safety features - of drawdown, especially the "hidden risks" such as fees and charges.

dunstonh

Ed I have no doubt you are happy to ride out the ups and downs and know that these sort of things are quite normal to put up with. You do know enough on that front.

However, the majority of people out there get worried if they lose 5% let alone 20% or 30%. So, for those, doing drawdown can create a worry. If they have little or no other retirement income or savings/investments then it can create a big risk on their living standards. They may not be able to afford the risks.

So, sending people willy nilly into drawdown without knowing their financial circumstances, risk profile and investment knowledge and experience is dangerous.

EdInvestor

dunstonh wrote: »

However, the majority of people out there get worried if they lose 5% let alone 20% or 30%. So, for those, doing drawdown can create a worry. If they have little or no other retirement income or savings/investments then it can create a big risk on their living standards. They may not be able to afford the risks.

They need to focus on the (rising) income, not the fluctuations in capital value - this is a matter of education in my view.It is of course important to have enough other guaranteed income ( state pension, other guarnateed pensions) to cover the basics.

Also they need to use asset allocation to reduct fluctuations in capital value.

It is possible to reduce risk if people are willing to learn.