SIPP, Hargreaves Lansdown and Funds

dunstonh

EagerLearner wrote: »

Hi all, are HL still good for SIPP's - and has their portfolio area improved any?

It's a good SIPP.

It's overated here as a pension product as many people dont realise that it costs more than most stakeholder and personal pensions and go into it thinking its the cheap option. However, when compared with other SIPPs, it stacks up very well.

Their fund range is on par with what you would expect from a fund supermarket.

bigbloke45

I don't agree that SIPP's are more expensive than most stakeholder or personal pensions; it really depends on what you are going to invest in. If you want to invest in stocks and shares etc. then a SIPP has got to be cheaper. Stakeholder/personal pension funds make an annual charge, but they also deduct "expenses of management" before the apply the AMC. These include all dealing costs, salaries of all employees, VAT etc.... With a SIPP you pay the stockbrokers charge and maybe a SIPP annual charge. You don't pay all expenses of management as well!.

dunstonh

bigbloke45 wrote: »

I don't agree that SIPP's are more expensive than most stakeholder or personal pensions; it really depends on what you are going to invest in. If you want to invest in stocks and shares etc. then a SIPP has got to be cheaper. Stakeholder/personal pension funds make an annual charge, but they also deduct "expenses of management" before the apply the AMC. These include all dealing costs, salaries of all employees, VAT etc.... With a SIPP you pay the stockbrokers charge and maybe a SIPP annual charge. You don't pay all expenses of management as well!.

You are correct. However, we are talking about in the context of funds.

A stakeholder pension (and some personal pensions) will be cheaper than a SIPP for the purchase of funds.

bigbloke45

I'm not sure I can agree that stakeholder/personal pensions will be cheaper for the purchase of funds; I think it depends upon what you mean by "funds", for example, you can buy an index tracking "fund" from , say, L&G at 0.5% amc but, you could track the index via i-shares at a fraction of the L&G charges. You could also invest in Investment trusts which would be cheaper than the average stakeholder/personal pension.

But perhaps are we coming from the wrong direction in the first place? Maybe it would be better to decide on the investment strategy first. Stocks, bonds, property, geographical asset allocation etc. either held directly or via some sort of fund. Then go and find out who can give you the best deal on your proposed investment selection.

For most people, this would definitely mean taking investment advice (which has to be paid for one way or another) and then acting upon it. If one is not willing to spend time and effort on an ongoing basis, then I don't think a SIPP is the right approach.

I just get fed up with hearing the same old "Top Down, theme driven" or "Bottom up, stock selection" garbage from "active" fund managers. Only Alex Masterly tells it like it is!

paolo02

Itoo am looking for good performance from a sipp provider, and say this about my situation; it is 4 weeks 'till my 60'th, can't decide whether to take my pension now or in 3 or5 years time..h&l tell me i can draw my pension and at the same time start a sipp, true? My youngest are 7 and 11, i am freelance with plenty of work at the moment, any advice welcome, cheers!

EdInvestor

paolo02 wrote: »

.h&l tell me i can draw my pension and at the same time start a sipp, true?

Do you mean they are suggesting income drawdown (aka unsecured pension)? Under drawdown you put your pension fund in the SIPP, take out your 25% tax free cash and then invest the rest of the money so that it generates an income.

Is that what you mean?

jamesd

You can start a SIPP and either continue growing the money or take the pension with up to 25% tax-free cash initially and drawdown and continued investing for the rest of the fund. Do you want to actively manage the money or would you prefer to buy an annuity?

The following questions are also significant but could prompt enough discussion for it to be worthwhile for you to start a topic on your retirement planning with the answers rather than solely discuss here what you can technically do with a SIPP.

What is your expected income in retirement? 20-25,000? Enough to be a higher rate tax payer?

One reason to take the pension now is to get cash to use to invest inside a stocks and shares ISA to generate ongoing income that's tax free.

Any prospect of inheritance tax? Of you needing residential care in a council home?

Do you need any extra income now?

wombat42_2

Surely one big advantage of HL is that you can combine your SIPPs, PEPS & ISAs in the same account which is very convenient. I dont know anywhere else that would allow this.

Also Merchant Investors PP, dont have online accounts so HL is definately a plus. Merchant Investors typically charge about 1% on top of the funds AMC so typically annual fees are about 2.5%. As HL just charge AMC for SIPPS then surely HL will always be cheaper than a PP.

dunstonh

Surely one big advantage of HL is that you can combine your SIPPs, PEPS & ISAs in the same account which is very convenient. I dont know anywhere else that would allow this.

You are not combining them into the same account as that is technically not possible. They may well put them on the same statement which is quite common with fund supermarkets nowadays.

As HL just charge AMC for SIPPS then surely HL will always be cheaper than a PP.

PPs can actually be a lot cheaper although some can be more expensive. SIPPs are not the cheapest option. Especially for cautious individuals. Although higher risk individuals would prefer the investment options that are available on SIPPs/fund supermarket pensions which are less likely on personal pensions.

wombat42_2

dunstonh wrote: »

You are not combining them into the same account as that is technically not possible. They may well put them on the same statement which is quite common with fund supermarkets nowadays.

quote]

I appreciate that but a single online HL "account" can be used to view all holdings such as ISA/PEPS and SIPPS.