Warning re Stakeholders/Personal Pension vs SIPPS

moneytroll

thanks a lot for the link - that should be much clearer than decifering individual provider's way of publishing those...

EdInvestor wrote:

Now if you saved 200 quid a month into a fund for 25 years @ 8.5% average annual growth you would end up with a fund worth 197,387. But at 7% growth you would only get 157,494..

I have thought about that, but the only way to pay significantly less charges is to buy those tracker funds and they are just not going to do as well IMO... If I could invest into some amazing hedge fund with a genius of a manager and pay 5% amc, and the fund would consistently outperform other funds, I would do that without hesitation, and tip him on top! Wouldn't you? I think maybe for general consumer, they should just publish the net figures of yield (after all charges), so the charges don't bug people unnecessary (unless they are astronomical) and leave the breakdowns to IFAs to figure out - it's all about frame of mind.

<Fund references removed by Pal>

The high income one is unfortunately overflooded. The SIPP one seems still a bit of a gem. (I am not recommending it, just personal observation.)

EdInvestor wrote:

I suggest you take a look at the HL Sipp if you plan on making regular contributions into funds.If you want to do income drawdown at retirement you'll be wanting to move to a Sipp anyway, so may as well do it now
.

I might end up doing it...thanks. But if it is easy and not costly to move same funds between SIPPs and PPPs then there's no harm trying out different ways to see what suits best (when I finally understand how the charges work). Most important is getting the 'right' funds and a balanced diversification I presume.

EdInvestor

moneytroll wrote:

the only way to pay significantly less charges is to buy those tracker funds

Not so. Buy a portfolio of shares on a "long term buy and hold basis" and after you have set it up, if you have it in a broker account or Sipp with no annual fee, you will pay no charges, other than a small annual amount to reinvest your divis If you use a Halifax Sharebuilder account the charges are so low, it's affordable on a regular saver basis (though this is not a Sipp of course).

No, there's another one by Woodford too, only designed for pensions.

If you mean this one, it seems to be closed. Judging by the list of shares it owns, it is being run on his normal equity income principles.

It is very easy to run a share portfolio on equity income lines, I do it myself.Buy and forget.

The high income one is unfortunately overflooded.

What do you mean "overflooded"?

Pal

References to specific fund recommendations have been removed to protect this website. Please do not recommend specific FSA regulated investment products on this board.

whiteflag_3

But there is still some potential for consumer detriment ? for example, some customers might be persuaded to join a SIPP when a standard personal pension or stakeholder pension might better meet their needs. We will seek to mitigate risks to consumers before regulation in April 2007 by:

monitoring SIPPs promotional material;

liaising with trade bodies to encourage member firms to behave appropriately; and

encouraging all firms to adopt regulatory standards now before formal regulation begins

This is lifted directly from the latest FSA bulletin concerning the regualtion of Sipps and the latest FSA consultation document.

Clearly even the UKs finanacial regulators recognise that SIPPS are certainly not for everyone :exclamati

[Deleted User]

I moved a big pension out of a stakeholder and into a sipp. The deal completed last week. I have just compared the scottish widows fund price with the sipp value and my sipp is already worth £1761 more than it would be if still in SW

I am mainly in cash as I am slowly buying into stocks for a high yield portfolio with a % of the sipp. I have limit buys on several stocks ie they will automatically be bought when the price falls to a certain level. I love the flexibility and being able to sit tight or move fast according to what I think the stockmarket is up to

Once the hyp stocks are bought they will be left alone to gather dividends year on year

A big public thank you to edinvestor for his excellent advice

ReportInvestor

Yes kittie, even I am going to follow ed's line in 2006/7 after sitting on the sidelines for a year or so.

The Chancellor allowing up to 25% tax free cash at 50 (or 55 by 2010) is likely to drive the SIPP bandwagon forward much more quickly the then FSA's caution is going to hold it back.

I wonder if Gordon will be surprised at his reduced tax intake in 2006/7 as a result?

Pal

SIPPS have misselling all over them. The media fever around them is remarkably similar now to the dot.com day traders. Still, each to their own.

I met a bloke a few days ago who has managed to lose over £60k in 18 months from trading within his SIPP, over a period when stock markets rose quite dramatically. He is employed as a trader, and is apparently very successful at work, so no idea how he managed it! Suffice to say he is not posting on websites boasting about his investment prowess! A good example of how even people who should know what they are doing frequently do not? People who do not invest for a living stand very little chance IMHO. It is all just blind luck.

Kittie - You have not made any profit at all yet because you haven't retired. Measuring very short term gains compared to other short term performance targets is utterly pointless. Come back when you retire with the comparison of your final funds. Only then will you know whether it was ultimately a good idea.

Then again, don't bother, there really is no point. Looking at past performance is exactly the same as kicking yourself for not choosing last week's lottery numbers.

whiteflag_3

Pal wrote:

SIPPS have misselling all over them. The media fever around them is remarkably similar now to the dot.com day traders. Still, each to their own.

I met a bloke a few days ago who has managed to lose over £60k in 18 months from trading within his SIPP, over a period when stock markets rose quite dramatically. He is employed as a trader, and is apparently very successful at work, so no idea how he managed it! Suffice to say he is not posting on websites boasting about his investment prowess! A good example of how even people who should know what they are doing frequently do not? People who do not invest for a living stand very little chance IMHO. It is all just blind luck.

Kittie - You have not made any profit at all yet because you haven't retired. Measuring very short term gains compared to other short term performance targets is utterly pointless. Come back when you retire with the comparison of your final funds. Only then will you know whether it was ultimately a good idea.

Then again, don't bother, there really is no point. Looking at past performance is exactly the same as kicking yourself for not choosing last week's lottery numbers.

Well said PAL.

The irony I see on this board is that the very people that dont want to recognise the downsides to Sipps and the potential for misselling, are the same peolpe who bang on about the last (apparent)pension misselling scandal and the current endowment problems. : :rolleyes:

dunstonh

I have just compared the scottish widows fund price with the sipp value and my sipp is already worth £1761 more than it would be if still in SW

Scottish Widows have a very good fund range. You need to be comparing like for like over the long term to get a real idea. For example, you could be comparing low risk scottish widows funds against higher risk funds in the SIPP. If you had the higher risk funds in Scottish Widows, how do you know that they wouldnt have done the same as the SIPP?

As we have said before, the pension wrapper does not make or lose money. Its what you place inside of it that matters.

SIPPS have misselling all over them. The media fever around them is remarkably similar now to the dot.com day traders. Still, each to their own.

The FSA have already issued warnings about SIPPs and the potential over use of them. RU64, whilst it still exists, offers protection to the consumer on advice sales but of course, execution only doesnt offer that protection.

The irony I see on this board is that the very people that dont want to recognise the downsides to Sipps and the potential for misselling, are the same peolpe who bang on about the last (apparent)pension misselling scandal and the current endowment problems. : :rolleyes:

Good point. We continue to see single investment strategy, higher risk solutions being presented as the best course of action by some. Yet this is the exact same approach they criticise advisors of in the past.

[Deleted User]

I am comparing my sipp with my (ex) sw fund

ie like with like

ie my money with my money, whether in a stakeholder or a sipp