SIPP, Hargreaves Lansdown and Funds

bosa

With respect to the Guardian Managed fund their customer services informed me I would incur no charge if I transferred the fund to another pension provider. No MVR would be levied.

The other pension is with Clerical Medical and is a 75%/25% split between it's European and Evergreen funds. Again an AMC of 1% applies. Their customer services are posting me a schedule of exit charges which are around the 2% mark on total fund value.

In addition I have another £40k in ISA's spread between Fidelity European, Invesco Perpetual European, HSBC FTSE 250 tracker, Henderson Global Tech and cash.

As of last month I am mortgage free and looking on my pension for income only.

EdInvestor

bosa wrote: »

I am considering transferring two personal pension plans into a SIPP. One has no exit fee the other a nominal amount.

The combined cash total is about £140k. I'm 41 and don't plan on making any further contributions for the foreseeable future.

If an annuity won't be taken for at least 25 years would it still be prudent to buy into funds in stages ?

Over what kind of time frame should I be drip feeding the transferred cash into selected funds to benefit from pound cost averaging ?

What you need to be looking at is how to invest the money for best returns over your timescale.

Asset allocation is very important = what percentage in equities, bonds, commpercial property, cash?in this way you adjust for risk.

You can access top quality funds in a SIPP, but make sure you choose a low cost one, eg at https://www.h-l.co.uk

Study their website at your leisure to learn about the best funds.

bosa

I've had a look at what my charges could be assuming a rate of return on all investments of 5% over inflation for the next 25 years with current £147k pot and no more contributions.

Option 1: leave pension plans where they are with AMC 1% and Guardian Choices monthly management fee.

£390k cumulative effective charges £107k

Option 2: move pension plans to h-l with actively managed funds AMC 1.5% and early exit fee of £2300 with Clerical Medical. Switching between funds at h-l no fee.

£341k effective charges £148k

Option 3: move pension plans to Sippdeal and spread them into 10 ETF's/bonds with average AMC 0.5%. Early exit fee of £2300 as above for Clerical Medical.

rebalancing maximum once a year = 2 x 10 ETF/bonds (buy and sell)

Dealing online £9.95, telephone £29.95 (rising 4% per year)

online £420k effective charges £70k

telephone £405k effective charges £84k

So taking my eggs and spreading them into 10 or more ETF baskets from a charges point of view only, looks like a fair move.

Do Sippdeal allow online dealing of ETF/bonds or are they telephone only like h-l ?

EdInvestor

bosa wrote: »

Do Sippdeal allow online dealing of ETF/bonds

Certainly they do for ETFs.Gilts and bonds are by phone at pressent, but the LSE will open a retail bond market in Febriary where individual corporate bonds can be traded in tranches of £1k or so, unlike the current £50k.No doubt that will then be doable online.

bosa

Thanks Ed. Is there somewhere online where I can get a handle on what my asset allocation to risk profile would be ?

I checked my 5 year and 10 year annualised returns on Morningstar for my current funds and it would make you weep ! I'd like to get more proactive in where my money is invested. ETFs look like they could be up my street.

EdInvestor

Here's a US one, gives a rough idea.You should perhaps include commercial property in a UK profile instead of municipals.

http://www.ipers.org/calcs/AssetAllocator.html

bosa

I'll give it a try, thanks again.

Gasher

Another good company for a SIPP, with 0% initial is sterling financial services. Its based on the standard wrap and offers good value for money and broad selection of funds.

derx

I wouldn't bother with Hargreaves Lansdown. They spam me with their emails, and when I actually asked them to help with a pension fund transfer, they couldn't even be arsed to reply.

Aegis

derx wrote: »

I wouldn't bother with Hargreaves Lansdown. They spam me with their emails, and when I actually asked them to help with a pension fund transfer, they couldn't even be arsed to reply.

You can opt out of emails, and I recently asked for help with a pension transfer, and got a form sent through within 5 minutes.