SIPP investment ideas for a 25 year old

EdInvestor

How likely is it that a typical small time retail investor can find an IFA who is willing to set up a pension on a highly competitive execution-only basis such that it is cheaper than the HL SIPP?Most posters are having trouble funding an IFA who will operate on the normal full commission basis -they are simply not interested in low net worth punters.

Whilst in theory what Dunstonh says may be true,one doubts the 'product/service' is actually available in the market.

jamesd

If desperate there's always one last resort option: ask dunstonh to prove it by buying the product from dunstonh's own company.

cloud_dog

As mentioned previously we moved one of the OH pensions from AENON Equitable Life in to H-L and I thought I'd go back to their site to see if I'd missed anything and whether perhaps I should have stayed with them (etc, etc).

The info on the web site around the DIY aspect still refers to 'your IFA' or 'discretionary manager' and whilst I could switch funds and change some details online 'only your IFA can see the value of your pension' - !!!!!!! (sorry for swearing) but,whats that all about?

As Ed states I think Dunstonh is probably accurate if you are a high net worth client but for all us other 'normal' people jamesd best summed it up.......

Originally Posted by jamesd
Good direct sales of an insurance company based personal pension with similar easy online dealing could be a good competitor to them. I don't know of one that sells direct that does that and is competitive on price at the moment, though.

I also feel some people get hung up on charges, whilst they should be considered fund selection needs to be based on performance.

dunstonh

How likely is it that a typical small time retail investor can find an IFA who is willing to set up a pension on a highly competitive execution-only basis such that it is cheaper than the HL SIPP?

Cavendish do it and Martin makes that point in his pensions article. They dont offer the best pensions currently available (price wise) but the ones they do offer would be cheaper than HL.

As Ed states I think Dunstonh is probably accurate if you are a high net worth client but for all us other 'normal' people jamesd best summed it up.......

There are some pension providers that do discount heavily on large fund values. Also, IFAs are more likely to discount on larger fund values. You also need to remember that HL isnt offering much of a discount on its SIPP. So, size of fund may well come into play somewhat. However, you do then have to question if its worth small funds being on a SIPP. Small funds may as well be on a cheap stakeholder or personal pension as you dont benefit as much from the wider investment choice with a small fund.

Most of those responding in this thread know about investing and want the functionality to allow unit trusts, ITs and/or shares. However, very many that use the SIPP havent that sort of knowledge and have no requirement for many or most of its features. They just get drawn in to the marketing.

If you use the features and options its fine. If you dont then its an expensive folly.

EdInvestor

dunstonh wrote: »

Cavendish do it.

No they don't.

They dont offer the best pensions currently available (price wise) but the ones they do offer would be cheaper than HL.

Possibly but they are not comparable in terms of choice of funds.

cloud_dog

dunstonh wrote: »

There are some pension providers that do discount heavily on large fund values. Also, IFAs are more likely to discount on larger fund values. You also need to remember that HL isnt offering much of a discount on its SIPP. So, size of fund may well come into play somewhat. However, you do then have to question if its worth small funds being on a SIPP. Small funds may as well be on a cheap stakeholder or personal pension as you dont benefit as much from the wider investment choice with a small fund.

Most of those responding in this thread know about investing and want the functionality to allow unit trusts, ITs and/or shares.

dunstonh, I think we are probably come at this discussion point from different perspectives; you - charges, me - investment choice/flexibility. Unfortunately it looks as though HL are pretty much out there on their own at the moment for small pension pots and so attacking the HL SIPP appears as an attack on HL. I know HL aren't perfect (and SIPPs possibly also) but.....

1. The OH only has a relatvely small pension pot (need to grow it actively)
2. I dont want to go through an IFA
3. Pension companies (really) want me to go via an IFA (that is their primary(?) sales channel)
4. I am a fairly finacially savvy sort of guy
5. I can (and have) far exceeded the SIPP growth compared to previous pension pot growth
6. Some of the 'growth' has come about because I have been able to be 'out of the market'; something which was a nightmare previously

dunstonh wrote: »

However, very many that use the SIPP havent that sort of knowledge and have no requirement for many or most of its features. They just get drawn in to the marketing.

If you use the features and options its fine. If you dont then its an expensive folly.

Simple way to move past these recent 'hang ups' would be for the OP to state if they are aware of the responsibilities in running a SIPP (its so long ago I cant actually remember the OPs exact post/phrasing).

EDIT: Just had a quick look........ It appears as the OP has a self invested S&S ISA they 'may' be 'relatively' finacially aware (lots of wooly words here). The other question would be, could you identify a PP provider who could (as an example) provide the OP with the funds they have highlighted?

jamesd

cloud_dog wrote: »

I also feel some people get hung up on charges, whilst they should be considered fund selection needs to be based on performance.

Exactly. Saving half a percent while losing five percent performance is a losing proposition. Investments come first, pricing to get them second.

trader099

:Originally Posted by dunstoh
Over 90% is SIPPs taken out after A day invest in funds. Many of those using funds are using multi-manager funds (HLs on MM funds for example) or fairly standard balanced managed funds. These funds offer nothing that cannot be achieved on a stakeholder or personal pension for a lot less cost.

If someone is going to utilise the features and options of a SIPP then fair enough. However, too many are going into SIPPs thinking they are low cost when they are not and then picking pretty naff investments with it.


The problem there is that the majority are "sold" by IFA's with old style qualifications who are not able to recommend the stocks and shares that reduce the amc's to a level which make the SIPP shine. This will change over time now that there is no distinction between IFA's and stockbrokers in terms of what they are allowed to advise on. IFA's need to learn to charge for investmet management (and update their qualifications to do it) and stockbrokers need to get qualified to talk about pensions. Since the FSA merged both professions together by the back door when they made everyone CF30 theres no excuse for not using products to their fullest extent. The products are there, its the quality advce that is generally missing

dunstonh

The problem there is that the majority are "sold" by IFA's with old style qualifications who are not able to recommend the stocks and shares that reduce the amc's to a level which make the SIPP shine.

The split isnt available but this thread is focusing on DIY investments and not IFA. Most IFAs dont actually recommend SIPPs actively because most consumers have no need for a SIPP. Some firms have though made SIPP recommendations a priority and they are coming a bit unstuck with that now.

This will change over time now that there is no distinction between IFA's and stockbrokers in terms of what they are allowed to advise on.

The FSA hasnt made any changes on that front yet. They have suggested that IFAs will be allowed to recommend ETFs and unpackaged ITs after the end of 2012 but its not cast in stone. Another arm of the FSA say there are too many products. So, you have one part of the FSA saying there are too many and another part saying that IFAs should have more.