SIPP, Hargreaves Lansdown and Funds

dunstonh

I understand that the fee for advice to the IFA is one off and then they may remit the annual trail.

As would many IFAs with pots of that size.

If you require an annual review and balancing for a large portfolio then is the HL 0.5% fee a better or a reasonable deal given the online dealing facilities, switching etc.

HL give you no review. It's a DIY contract. If you use an IFA and the IFA is servicing for that 0.5% then the IFA has to be the better option by default as you are getting something for your money.

If we lumped them all together with a “wealth manager” for a discretionary portfolio could this 0.5 % trail be rebated and replaced with an annual fee based system. Many (e.g. BestInvest) seem to charge about 1%+VAT per annum but then do rebate the 0.5% so would work out at about 0.7% per year – or £7k per £1m which sounds quite a lot compared to a fee based system.

Trail can be rebated with IFAs or DIMs and replaced with explicit charging. Not all providers yet offer that option but its possible if you want it to be. Trail set up at point of sale can have the advantage of not having VAT on it.

Would discretionary managers access the wholesale version for the funds which may offer better value (to offset against the 0.7%. IS this a valid assumption?

When you say wholesale, do you mean institutional versions? Again, IFAs and DIMs can have access to these. The range will largely depend on the provider of the platform and that can form part of your discussion.

GoGas

Thanks for the input. Still leaves the issue that I have been trying to look at for a few months which is how to choose a DIM or IFA as there seems no real performance guides to judge by. There is http://www.assetrisk.com/ and their PCI ( Example ) which at least give the performance for number of DIM Asset models even if you do not know exactly who they are. The difficulty is that a DIM or IFA does not seem to publish their performance - but then I have never taken it so far as short-listing,visiting and asking them for the figures at a visit. It is pretty difficult to know how to draw up the short list.

I think you would probably get better value from an IFA than a larger DIM but as performance figures are not published and it is likely to be a smaller organisation or an individual the spread of performance is likely to vary enormously. It is also difficult to know what their client base is like as most advertise that they deal with small or large portfolios. At least the list on citywire does give an indication for some of the larger DIMs as to average portfolio size whihc is helpful

Steve

55GN

Does the HL fee not cap at £200 across all of your investments with them?

I have an HL SIPP and as far as I know they charge 0.5% for share and (most) ETF's upto a max of £200 per year.




This is off their site.

What are the charges for the HL SIPP?
Set-up Free
Contributions
(including transfers in) Free
Annual charge 0% on cash and over 2,000 funds.
For all other funds & investments we charge 0.5% up to a maximum of £200 per annum.



This makes it a lot less of a cost for investors with holdings of more that £40k.




I'm not sure if the one off £200 fee is for each account or covers both your SIPP AND ISA accounts each year.

CharlieG

Hi, I'm new to this thread and would like advice on what to do with a pension I need to transfer from Standard Life (its a pension share following divorce).

The fund is £150,000 and I've consulted a friend who is an IFA and he has recommended putting it with the Pru, 60% in a with profits fund and the rest in 4 x 10% in managed funds. My concern is that wherever I look I see with profits funds being slated. I have spoken briefly to John Charcol's pension arm and to another helpline, both of whom said it was a long time since they'd recommended putting funds into a with profits scheme.

I'm interested in managing this myself and am considering a SIPP via HL or Alliance, as it seems the overall cost would be less - the charges on the IFA's recommendation were 1.665% which included his annual charge for advice, which I'm not convinced I need.

Your views would be very welcome as I'm wary of handing the whole lot over to an insurance company to manage, particularly since the Pru have had bad publicity regarding their Inherited Estate funds.

Many thanks in anticipation ... Charlie

dunstonh

My concern is that wherever I look I see with profits funds being slated.

That is correct. However, Prudential are the exception to the rule. They have consistently come in with decent returns for the levels of protection they offer. Plus, the modern Pru plans work a little differently to the old ones you see slagged off. That said, it is unusual to use WP nowadays and is really a niche fund.

I'm interested in managing this myself and am considering a SIPP via HL or Alliance, as it seems the overall cost would be less - the charges on the IFA's recommendation were 1.665% which included his annual charge for advice, which I'm not convinced I need.

Which is fine but you need to be aware that the HL SIPP does not rebate any of the IFA trail commission. So, in effect you would be paying the same as using an IFA but without getting the advice and servicing.

SeniorSam

Apologies if I should not jump into this thread, but I do have a query on Sipps and hope it's OK here. If not, please move and advise.

Having transferred several pension funds into a Sipp in 1999 the present value is over £250k, but £30k lower than transfer value due to market conditions and me not keeping a good enough eye on funds or understanding them.

Present Providers James Hay announced in February that any future levy made on any of their companies by the Financial Services Compensation Scheme would be recovered from the policies of clients. I stated that I will not accept that and am choosing to move my pension pot to another provider, without any exit charges, which is agreed.

I have been drawn towards Hargreaves Lansdown Vantage Sipp because of good reports and no initial charges etc, but am very concerned about the value falling now that I have past the age of 70.(Hence the name Senior Sam)

Although retired, I do not need to draw on this personal pension pot at present, but may wish to do so in the next few years (2-5) and appreciate that I could take 25% of the fund tax free anytime if I wish. My knowledge on pension funds is not great and I really wanted to have some advice on low risk funds, with low charges if possible and am not looking for fantastic growth, but security short term. HL cannot give me advice unless I agree to charges that would be made by an adviser and I wondered if anyone on this site could offer some guidance on low risk HL funds for me, or should I also consider other providers in this particular instance?.

Many thanks

Sam

webmasterpolo

Hi Sam

The forum cannot offer advice, and with a pot of £1/4m you really need it. Get an IFA to look after you, ask around and find a good one.

Best and only advice I can give.

-Web

SeniorSam

I was really looking for some guidance rather than specific advice as I know the site does not offer that. I decline financial advisers advice as the cost on this value of investment is higher than I am prepared to pay, or that I feel is justified.

I will be proceed in with HL and have selected 5 managed funds - Income & Growth - Income - Cautious - Distribution and one Global. The idea to spread the risk and the managers and review myself on a monthly basis.

If anyone would care to comment on which funds they think may be investments worth considering at this time, within those risk areas, it would be appreciated.

Sam

dunstonh

I decline financial advisers advice as the cost on this value of investment is higher than I am prepared to pay, or that I feel is justified.

You are with HL and you are paying for advice.

I will be proceed in with HL and have selected 5 managed funds - Income & Growth - Income - Cautious - Distribution and one Global. The idea to spread the risk and the managers and review myself on a monthly basis.

Hopefully none of these are the HL own brand funds. A true waste of money if they are.

What is it you are trying to achieve? The use of a portfolio fund is that the reviews and rebalancing are handled within the fund (and the costs reflect that). So, in effect you have a SIPP that is charging the same as an IFA doing ongoing servicing and using funds that are charging you for reviews/rebalancing and you then want to do it yourself as well. You are creating extra layers of charges unnecessarily.

jem16

SeniorSam wrote: »

I was really looking for some guidance rather than specific advice as I know the site does not offer that. I decline financial advisers advice as the cost on this value of investment is higher than I am prepared to pay, or that I feel is justified.

I can't quite follow your logic on this one. You say that you feel the cost of advice is higher than you are prepared to pay but yet you choose an option without advice which will see you pay the same, if not more, than an IFA providing advice.

I assume you are talking about the amount already mentioned in this thread?

https://forums.moneysavingexpert.com/discussion/3134266

I will be proceed in with HL and have selected 5 managed funds - Income & Growth - Income - Cautious - Distribution and one Global. The idea to spread the risk and the managers and review myself on a monthly basis.

Is the Growth & Income this fund?

http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/h/hl-multi-manager-income-and-growth-portfolio-trust-accumulation

This is a multi-manager fund with a TER of 1.91%. This would be more expensive than a fund which an IFA is likely to build a portfolio with.

I'm puzzled Sam - you seem to want to save money by going DIY but are going to end up paying much more.