Sipp Centre and IFAs

casakama

I had £133,000 transfered from my pension fund with Norwich Union and I was advised by an IFA to put it into a SIPP. As I am living abroad I was told this was my best option as a QROPS would be too expensive with just this amount.
Norwich told me prior to its maturing on my 60th birthday that I could get 25% tax free lump sum and the balance could only go into a pension fund or an annuity, I therefore asked an IFA to deal with this for me.
I received my 25% and I now find with fees etc my 99,000 pot has been reduced by nearly £3000 with fees etc.
My questions are: Do i need an IFA, Can I move my money from the Sipp Centre to another company, Is there any way I can manage this money myself because the best my IFA came up with was to stick into Anglo Irish at 3.6% . This has cost me £1200 in up front fees and £45 per month plus my SippCentre fees.

Any advice would be most welcome

dunstonh

Do i need an IFA

No.

Can I move my money from the Sipp Centre to another company

Yes. Although you run the risk of paying fees again depending on how you do it.

Is there any way I can manage this money myself because the best my IFA came up with was to stick into Anglo Irish at 3.6% .

You can do it if you like.

This has cost me £1200 in up front fees and £45 per month plus my SippCentre fees.

Which you of course knew about before you agreed to do it. Although you said earlier in your post it was £3000, not £1200.

casakama

Thank you DunstonH the £3000 includes all fees. Knew originally that the IFA would take a percentage of any funds invested in with no fee to myself. With the downturn he said that a safe saving for now would be in Anglo Irish. The fee was discussed later, I assumed in my naivety that his fee would be as before ie out of the investment fee that the IFA would receive.

dunstonh

Investments tend to be explicit in charges nowadays. Indeed, it will be compulsary from 2012 (although there will still be ways of spreading the costs). So, if a fee is £3000 then it is £3000 you pay. This ironically is cheaper in the long run as with commission you pay it in annual charges for many years after the cost of advice has been covered. In your case, use of a deposit account means no commission or income payable to the IFA so the fee was always going to be explicit.

Note for the future is that always agree the fee in advance and unless its a small transaction, always work on fee basis and not commission. That way you know exactly what the cost is before you start anything. The only proviso to that is that product providers will have their fees as well.

EdInvestor

Why don't you move over to the DIY arrangment at Sippdeal ( same company).No annual fee, no need for an IFA. Don't think they are charging for transfers in at present.

https://www.sippdeal.co.uk

sunandwind

I have 3 conventional pensions policies and am now looking at some higher risk investments which I want to put in a SIPP.

My IFA is recommending Standard Life (as they accept some of the more unusual investments in a SIPP). He is also recommending using Brewin Dolphin to help manage the funds in the SIPP. This is all OK until I look at the charges: the SIPP provider has all sorts of charges (which are on the high side for unusual investments), BD charge 1% per annum for the funds they manage and the IFA wantys to charge 3% (down from 5%) for all new funds going into the SIPP plus 0.5% per annum. I don't mind paying if I think I am getting a valuable service but there are limits (and I wish some of the fees were refundable if they don't manage to outperform a given bench mark)! I've tried negotiating the IFA fees down and would prefer to pay the IFA on a fee basis for work actually done/advice given. Unfortunately, the firm now only charges on a fee basis as a % of the money involved (rather than £/hour) so it looks just like commission but with a different name! Am I being 'ripped off' or am I being too miserly?

whiteflag_3

sunandwind wrote: »

I have 3 conventional pensions policies and am now looking at some higher risk investments which I want to put in a SIPP.

My IFA is recommending Standard Life (as they accept some of the more unusual investments in a SIPP). He is also recommending using Brewin Dolphin to help manage the funds in the SIPP. This is all OK until I look at the charges: the SIPP provider has all sorts of charges (which are on the high side for unusual investments), BD charge 1% per annum for the funds they manage and the IFA wantys to charge 3% (down from 5%) for all new funds going into the SIPP plus 0.5% per annum. I don't mind paying if I think I am getting a valuable service but there are limits (and I wish some of the fees were refundable if they don't manage to outperform a given bench mark)! I've tried negotiating the IFA fees down and would prefer to pay the IFA on a fee basis for work actually done/advice given. Unfortunately, the firm now only charges on a fee basis as a % of the money involved (rather than £/hour) so it looks just like commission but with a different name! Am I being 'ripped off' or am I being too miserly?

Yes , ripped off big time. What s your IFAs link with Brewin Dolphin?

Well done not falling for the lastest IFA scam of charging "fees" that are a percentage of funds invested. Its commission .

In my opinion

get a new IFA that charges and hourly rate
and then look long and hard whether you actually need a SIPP at all

EdInvestor

What kind of "unusual investments" are you talking about?

sunandwind

My IFA has been directing a number of clients to BD - don't know if they get any cut from them. My suspicion is that with clients unhappy about falls in value of pensions and investments, they are seeking to offload some of the responsibility (liablity?) in selecting funds.

I'm not sure if I can instruct BD directly or open a SIPP with standard life without an IFA.

'unusual investments' - £25K chunks in things like private equity 'club' investing in developing wind turbine sites, forestry, etc . Whilst these are higher risk, if they work out the potential returns are high so it seems to make sense to get the tax benefits of a SIPP. These are of course on top of more conventional lower risk investments (although the latter have taken a hammering). I'm also seeking to diversify types of investements (asset allocation in unit funds is pretty useless when all unit funds take a nose dive).

whiteflag_3

sunandwind wrote: »

open a SIPP with standard life without an IFA.

if you must have a Standard Life SIPP there is nothing to stop you going direct

whiteflag_3

sunandwind wrote: »

My IFA has been directing a number of clients to BD - don't know if they get any cut from them.

Why dont you just ask him then?