SIPP, Hargreaves Lansdown and Funds

whiteflag_3

JohnG wrote:

Hi,

A while back I spent some time deciding what or where to go with my small Equitable Life WPs pension fund.

Whilst I was deciding what to do I switched the funds within Equitable Life from With profits to unit linked as suggested by the very helpful Edinvestor. It meant paying an 8% transfer fee which was a blow but could not be avoided however I was amazed to find that after only a short time in the a Eq Life Unit Link fund it seemed to more or less recover the 8% loss where before in the WP fund it had been stagnating for a year or two! So this was obviously a bit of a bonus.

Anyway, I finally took the plunge and set things in motion to transfer the whole fund over to a medium risk SIPP with HL.

What I hadn't realised until I halfway through the process was that HL SIPPS are unable to accept Protected Rights funds and it wasn't until I receieved confirmation of the transfer from Equitable that one third of my pension turns out to be "Protected Rights"! I had no idea so now, having thought I had finally put everything to bed so that I can stop worrying about my blasted pension I've got to look at what to do with the remining fund still with Equitable - what an absolute nightmare pensions are! They're enough to send you to an early grave........:wall:

That Scottish Equitable plan that a nasty IFA recommended you would have accepted Protected Rights.

JohnG hopefully you are begining to realise this DIY route isnt the simplest way of doing things. OK the IFA might have made a bit of money but you could avoided the "absolute nightmare pensions are! They're enough to send you to an early grave........"

And then transfered the full fund to a full SIPP penalty free once the rules allow!

EdInvestor

Either way he has to do it twice.

You have to admit the system isn't user friendly - even to the people in the industry.

dunstonh

You have to admit the system isn't user friendly - even to the people in the industry.

Its inconvenient in places but not complicated and there are always options. In JohnG's case, a fund supermarket pension arranged on discount terms would have been better for him. It would have taken the protected rights and the ordinary rights and if the fund was large enough, he could have had a discount on the annual management charges which he doesnt get with HL. Plus, the fund supermarkets dont have a cash fund so you dont need to fiddle around with that.

It can be complicated if you dont know what you are doing or why you are doing it. Car engines are complicated. Some people can service them, others cannot and some try and make a balls up. If we made engines simple we would all be running round like Fred Flintstone (that would resolve the obesity problems!!!). So, we have people out there who can service the engines and you get the choice to pay for their service or not.

I would like to see stakeholder abolished and combined with personal pensions as stakeholder served its purpose and is now obsolete. I wouldnt mind seeing a move to phase out pension funds across the board and have unit trusts/oeics as the funds (currently only full/hybrid SIPPs and fund supermarkets use UT/OEIC funds). The same could then happen to life funds (again, some investment bonds already use UT/OEIC funds).

whiteflag_3

EdInvestor wrote:

You have to admit the system isn't user friendly - even to the people in the industry.

No i think its very straightforward for people in the industry

EdInvestor

Then why do I hear so many complaints about lifeco admin and service from IFAs - including on this board?

IIRC dunstonh has actually blacklisted ScotEq.

JohnG

Thanks for all the feedback (inc Whiteflag) on the Protected Rights issue.

I can honestly say I'm not sorry that I didn't go with the Stakeholder - that was the easy part of the decision process.

I'm disappointed that I was not aware of the protected rights issue with SIPPS but accept it's just another hurdle to overcome - indeed it was probably something I should have noted earlier but overlooked somewhere along the line.

I don't really want to have to transfer the main fund now with HL so I will look at putting the smaller amount elsewhere preferably with HL to keep things under one roof but will look at other opions such as those already mentioned.

Meanwhile I will keep my fingers crossed that the Equitable look after my Protected Rights money? :eek:

dunstonh

Then why do I hear so many complaints about lifeco admin and service from IFAs - including on this board?

IIRC dunstonh has actually blacklisted ScotEq.

I have one life company that I wont do business with due to poor service. So, does that mean I should black list every life company?

It is rare for people to post praise and negative points are what you are going to see. HL get more complaints on this forum than any life company so does that mean you should stop recommending HL?

EdInvestor

JohnG wrote:

Meanwhile I will keep my fingers crossed that the Equitable look after my Protected Rights money? :eek:

It's less than 6 months until you should be able to move it to its own similar SIPP side by side with the other one at HL (April 5 next year is the likely date, though this is NOT yet set in stone) so you may as well wait I guess, having already waited for more than 5 years to leave the WP fund.

What funds have you invested the SIPP money in BTW?

This is the key factor after all - as you found when you moved to unit-linked and regained the 8%.

One of the problems with pensions is that all the hassle about the tax wrapper itself distracts people from the area that should have their full attention: is their investment making good money?

JohnG

Hi Edinvestor,

My funds are invested in HL's Multi-Manager Balanced Managed Trust - I didn't want to risk too much but on the other didn't want to be over cautious and limit growth potential.

Now I have this in place I intend to look at the other funds available and perhaps, if I'm feeling brave, transfer some or all of it to something more interesting.

Will see how things go first and maybe use the PRs money when the time comes to invest in something more exciting?

Cheers for now
John

PS
I note there is alot of sceptism over HL from various members on here and whilst this does slightly concern me I was happier to go with them as they seem to go out of their to keep their customers informed of all the latest news etc.
I was even pleasantly surprised to receive a wine voucher for my transfer even though it was far below the amount officially required to receive it! :beer:

dunstonh

JohnG, with that fund alone, you are paying over the odds on charges. That sort of fund could have been obtained much cheaper on a personal pension (indeed, one similar at 1% stakeholder charge is available). If you are going to use a full/hybrid SIPP, you must make use of the additional funds or its a waste of money. Currently the IFA option of Scot Eq would have been just as good (if not better) and it would have been cheaper despite the IFA earning full commission on it.

I note there is alot of sceptism over HL from various members on here and whilst this does slightly concern me I was happier to go with them as they seem to go out of their to keep their customers informed of all the latest news etc.
I was even pleasantly surprised to receive a wine voucher for my transfer even though it was far below the amount officially required to receive it!

Dont read too much into that. There have been a number of posters that have said HLs service is poor. However, any problems would be a minority. I use it as a comeback to Eds frequent whinge that insurance company service is poor and you should use companies like HL. Yet they suffer the same problems.