Drawdown logistics

whiteflag_3

EdInvestor wrote: »

Don't be so silly whiteflag.I may as well ask whether you and dunstonh are related since it is obvious that running financial advisory services is a full time job for both of you.:rolleyes:

you prove my point, you dodge the question yet again

Yet again you dodge the question- are you and Edinvestor related as its a trait both of you posess?

Why do you stick your nose in on threads that are clearly addressed to a particular poster yet ignore questions that are addressed at you?

This is one example

http://forums.moneysavingexpert.com/showpost.html?p=27830879&postcount=25

EdInvestor

There are no rules on this BB about who can contribute to what threads.Anyone is free to post - or not post - whatever they like, albeit observing the law, forum etiquette and the t&cs. Equally there is no requirement to respond to posters who may have their own separate agendas, so I won't bother to point this out again.

whiteflag_3

EdInvestor wrote: »

There are no rules on this BB about who can contribute to what threads.Anyone is free to post - or not post - whatever they like, albeit observing the law, forum etiquette and the t&cs.

If you say so- I just thought it was just good manners not to but in, and also good manners to respond a perfectly legitimate question. You might think its OK to pop in and out when it suits you but IMHO I just think you are rude.

Heres the link again

http://forums.moneysavingexpert.com/showpost.html?p=27830879&postcount=25

Equally there is no requirement to respond to posters who may have their own separate agendas, so I won't bother to point this out again.

Oh not that again:rolleyes: Agendas? been done to death on here a million times - its interesting that its your good self Edinvestor who brings up "agendas" when you are one of the very few on here that has one.

dxt_2

I am the OP and thank you for the various contributions and suggestions, some of which I have been following up.

In answer to some of the queries posed by posters:
I dislike an annuity because of its inflexibilty and even as a cautious investor prefer drawdown because I will have at least some control over how to react in case of inflationary periods and changing investment climates over the 15 years of the drawdown (I am 59 in good health). I dislike index-linked annuities because I perceive them to be poor value and again intensely dislike lack of control in having to make one decision that will last for the rest of my life.

I want to use EFTs because I target a modest growth rate and need to avoid all unnecessary charges ( for example in my ISAs I similarly use trackers, ETFs and Investment trusts and obtain return of all trail commission less a small fee). In the drawdown I am considering to use 7IMs range of 'AAP' funds because I feel that the allocation of money into different asset classes is more important for me in investing my fund than in attempting to find managers that will beat the indexes. If I use such a range of funds I can select my risk profile and get investment management at what is to me acceptable cost. If I use 7IM c-class units there will be no trail burden and I will get most efficient use of my fund.

I do not limit investments into this, I might go into other funds (though I have no interest in wine, property etc). I might get investment advice independent of my plan on hourly fee basis. Its just that in setting up the vehicle I want to be in a place where I am flexible for the future and can work it myself and have the greatest efficiency/lowest possible ratio of costs to growth, having no confidence that we will go back to previous growth rates that might have justified the expense ratios of former years.

I realise that in using drawdown v annuity as a cautious invetor that there is a risk that there will be insufficient funds at 75 to purchase an annuity at the same rate that the drawdown achieved. My fear of this is less than of my fear of being in an annuity when inflation is rising. I have other investments that could make good the difference at 75 and am prepared to take the risk that I will make wrong decsions in the SIPP. (having taken that risk over the years needed to build the fund, that seems no different).

So: I need a way of starting a sipp that I can buy myself, can accommodate phased retirement, that has online control by the end-user, can invest in ETFs, as well as if needed equities and funds, that puts any arising trail back into the fund.

Following suggestions of posters I have looked at Sippdeal, but ETFs are not possible and trail is kept by the wrapper. I looked at AJBell and their Platinum SIpp is a possibility, but its not online (though could link to a brokers online account so maybe OK) and costs £450 to set up and £480 annual fee plus fees for every drawdown payment, so there is a cost element there which I will have to balance against alternatives. When I looked last at HL I thought they could not take ETFs and also that they retained the trail so it was going to be expensive for my needs.

I will look further at the options. Again thanks for the input.

noh

ETFs can be purchased in a Sippdeal SIPP as far as I am aware.

Have you taken a look at the Alliance Trust SIPP ?

MiloH

dxt, it sounds like you're on the ball and I follow your train of the thought. Making a decision at 59 that you stick with for life is definitely one of the downsides of traditional annuities. Imagine buying a traditional annuity in good health at 59 then suffering an illness the year later that would have qualified you for an enhanced annuity. It's a tough choice for everyone and often involves choosing between a rock and a hard place, or comprising with a variety of hard rocky places.

I can't really help with where to go except reiterate Alliance Trust as an option to consider although last time I looked it was a fairly limited range of OEICS available.

My only other thought here is that your concerns relate around an inflationary hedge, investment control and a cautious approach with an eye on not wanting income to reduce at a later date due to lower funds / worse annuity rates. There are options such as third way pensions which give you some control over your investment strategy while paying for an insurance policy to ensure your income never goes below the starting level (though based on your comments you wouldn't like the charges!). Prudential's Income Choice annuity doesn't give you any control over the investment but does give you an element of inflationary hedge though investing in their with-profits fund as well as a guaranteed minimum income regardless of performance. You don't necessarily need an all-eggs-in-one-basket approach either so you could split the funds around. None of these comments are recommendations of course. Good luck with the decision you ultimately take.

EdInvestor

dxt wrote: »

Following suggestions of posters I have looked at Sippdeal, but ETFs are not possible and trail is kept by the wrapper.

ETFs are certainly possible in the Sippdeal SIPP.

Could you elaborate on why you like 7IM and AAP funds? The funds appear to have charges of 1.6% - which is very high for an ETF.How mcuh extra would you have to pay for the SIPP wrapper (which would presunably be provided by the various fund platforms they mention?

http://www.7im.co.uk/ContentPages/RetrieveBinaryFile.aspx?articleID=240

dxt_2

You are quite right EdInvest, sorry I misinterpreted an email from Sippdeal to me. They do offer ETFs as do Alliance Trust, (thanks noh - which I see also remits trail back to the fund if there is no nominated IFA and accepts Vanguard funds so look about as low an expense level as I have found. However they do not accommodate phased retirement in a USP drawdown plan).

It was the 7IM funds that Sippdeal do not offer in their standard product (and nor do Alliance).

I like 7IM AAP funds because they look to me like a fair value way of getting investment management and a wide asset class exposure against a selected risk profile. They are not an ETFs but funds of ETFs. 1.6% includes the trail, if I use c-class units inside a broker dealing account itself inside a pension wrapper (for example AJBell Platinum) it will be much less but, as you say, there will be pension wrapper charges.

EdInvestor

dxt wrote: »

I like 7IM AAP funds because they look to me like a fair value way of getting investment management and a wide asset class exposure against a selected risk profile. They are not an ETFs but funds of ETFs. 1.6% includes the trail, if I use c-class units inside a broker dealing account itself inside a pension wrapper (for example AJBell Platinum) it will be much less but, as you say, there will be pension wrapper charges.

Suggest you actually work out the fine detail of the costs.One suspects that the 7IM product will come out more expensive if it requires a bespoke SIPP as its wrapper.

dxt_2

Yes you may well be right.

I have looked more into Alliance (I like the trail rebate if no IFA and can hold ETFs but not the funds I would ideally select at outset so going forward over the years may lack investment content limitation - and, no phased retirement option); but other than that cannot find a solution other that Bespoke where trail is not lost to the investor.

So my choices would seem to be:

IFA: pay an advisor to set up a SIPP drawdown with account on Accenture, Transact or another of those good-looking platforms that are available to them but not to end users, agreeing a fee with commissions rebated to the fund.

Bespoke product (eg Sippdeal Platinum but I have seen others similar), doing it myself: can get what I want but looks rather expensive and in general hard to do (have to set up broker account, fees for trading and for bespoke SIPP, have to use external service to collect trail from broker account, lots of people to deal with etc) and I might fear that I was missing something.

DIY: looks more do-able but to get lowest expense to fund ratio would have to accept no phased retirement and less investment content flexibility than I really want.

If I go IFA route, and I have no objection to that as long as I am paying only for the services I require, and might in that case be fair value in the end, what would anyone think I should expect as an appropriate fee for:
-setting up a drawdown with phased retirement
-setting up platform trading with client visibility of account (but not it seems the ability to execute switches/trades). Platform can buy all classes of funds, OIECS, gilts, shares but not interested in property and other such alternatives. Any fund commissions returned to plan.
-fixed fee for executing subsequent switches/trades
-obtaining 5-year GAD recalculations (if not included in SIPP plan)

plus then I would have to pay the SIPP plan fee itself and what should the IFA be able to get for me: could I get it down to >= £250pa?

Even having spent quite a number of years investing, I am finding this all rather complex...