SIPP Questions?

middlepuss

Best of luck adman. Will be interest, when you've completed your exhaustive research, to know which provider you end up with and what funds you decide to invest in.

dunstonh

to be honest i will probably keep doing some more reading first before deciding on a fund

single fund investing is bad unless you go with portfolio funds or fund of funds. If you are going to use those then a SIPP is unlikely to be a cost effective option.

and maybe speaking to an IFA but i agree that as i will be setting this up myself and managing it myself that i need to learn about the different funds out there. I think i would prefer to be in control of my own finances and this is certainly the first step.

Remember that HL keep all the trail commission on a SIPP that an IFA would normally be paid. For that you get no advice or ongoing servicing. So, the cost of advice vs cost of no advice may not be much different.

adman_21

thanks middlepuss, i wish i could just make an easy decision! I am going to look at your fund example above as a starter for 10 i think and then see where i go from there. I have at least decided that the H&L SIPP looks like its the one for me and i will look at setting that up to start in Jan.

Again all the advice is much appreciated. Should have learnt about this about 10 years ago!

middlepuss

And, of course, whatever fund or funds you decide to put your monthly investment into when you start, you can always change and instead invest in other funds later on. And sell the one(s) you've bought and buy something else - though there's usually a cost associated with that. But it's not like the decision about which fund(s) is a one-off-and-for-ever decision.

jamesd

middlepuss wrote: »

A H-L Vantage account that is not a SIPP nor an ISA - i.e. just an account in which to hold investments - also rebates the initial charge on many funds.

Not according to any HL documentation I've seen, nor have I ever noticed a rebate paid to me even when buying thousands worth of funds in that account, which should have been very obvious in my loyalty bonus account if it had happened. As with the SIPP and ISA what you get is more units for your money.

The Fund and Share Account:

• has the same discounts as the ISA, for both initial purchase discount and annual charge rebates
• doesn't have the up to £200 charge for investments that don't pay HL commission

adman_21, learning is a good reason to do it yourself. Just be sure that you stay interested, or consider an IFA with annual servicing agreement if you won't look after things yourself.

middlepuss

jamesd wrote: »

Not according to any HL documentation I've seen, nor have I ever noticed a rebate paid to me even when buying thousands worth of funds in that account, which should have been very obvious in my loyalty bonus account if it had happened. As with the SIPP and ISA what you get is more units for your money.

James, you're right, it's not technically a rebate: you get more units for your money. The point is that you don't pay the initial charge when buying most funds inside the H-L Vantage account eg http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/a/allianz-rcm-brazil-accumulation, though on a few funds you do pay a little bit of the initial charge eg http://www.h-l.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/s/skandia-uk-best-ideas-accumulation

purch

Remember that HL keep all the trail commission on a SIPP that an IFA would normally be paid. For that you get no advice or ongoing servicing

Yes but you do get a very nice website, lots and lots of junk mail and a list of 150 Funds that they quite like.

dunstonh

purch wrote: »

Yes but you do get a very nice website, lots and lots of junk mail and a list of 150 Funds that they quite like.

edited to.....

and a list of 150 Funds that they quite like to sell as they get paid to do so.

There was an article in citywire this week saying that HL want the fund houses to keep paying them the IFA trail commission figure post RDR. Of course they do because its going to halve their income when that stops. I cant see it though.

Currently a 1.5% AMC sees HL getting around 1.1% of that. Post RDR they will get 0.6%. They want the fund houses to make up the difference without charging the consumer on top of the marketing payments that are already made to bundled platforms.

I suspect that the shareholders won't tolerate a drop in trail commission and they will introduce explicit charging. Although they may get some more fund houses to pay them some of the IFA cut. No doubt those funds will end up on the Wealth 150 list.

cashbackproblems

with a sipp you get 20% tax rebate but then pay this tax when you draw down the pension, so why not just put the funds in an ISA?

lvader

cashbackproblems wrote: »

with a sipp you get 20% tax rebate but then pay this tax when you draw down the pension, so why not just put the funds in an ISA?

You should have at least enough in a pension to make the most of your personal allowance after you have taken the 25% lump sum.