Sipp low risk investments help

SeniorSam

I did put this message in a Sticky on Hargreaves Lansdown but having read many more items on Sipps, I think it was in the wrong place, so am repeating my question as a new Thread. Hope that's OK.

Having transferred several pension funds into a Sipp in 1999 the present value is over £250k, but £30k lower than transfer value due to market conditions and me not keeping a good enough eye on funds or understanding them. Advisers want me to pick funds and do not help with advice on funds, which is what is needed, but I do understand their remit.

My present Sipp Providers James Hay (Funds with Friends Provident) announced in February that any future levy made on any of their companies by the Financial Services Compensation Scheme would be recovered from the pension policies of clients. I stated that I did not accept that and am now choosing to move my pension pot to another provider, without any exit charges, which is agreed within 90 days.

I have been drawn towards Hargreaves Lansdown Vantage Sipp because of good reports and no initial charges etc, but am very concerned about the value falling now that I have past the age of 70.(Hence the name Senior Sam)

Although retired, I do not immediately need to draw on this personal pension pot now, but may wish to do so in the next few years (2-5) and appreciate that I could take 25% of the fund tax free anytime if I wish. My knowledge on pension funds is not great and I really wanted to have some advice on low risk funds, with low charges if possible and am not looking for fantastic growth, but security short term.

HL cannot give me advice unless I agree to charges that would be made by an adviser and I know that he is going to say ' he cannot recommend' I wondered if anyone on this site could offer some guidance on low risk HL funds for me,without the often stated reply of 'do your own research' or should I also consider other providers in this particular instance, who have low charges ?.

Many thanks

Sam

jem16

SeniorSam wrote: »

Advisers want me to pick funds and do not help with advice on funds, which is what is needed, but I do understand their remit.

Can you clarify - are you meaning that you have an IFA who should be recommending funds for your SIPP or are you meaning that you were expecting someone at James Hay to recommend the funds?

I have been drawn towards Hargreaves Lansdown Vantage Sipp because of good reports and no initial charges etc, but am very concerned about the value falling now that I have past the age of 70.(Hence the name Senior Sam)

The amc on the HL SIPP funds includes the 0.5% normally paid to an IFA for ongoing servicing - it is not rebated. So basically HL are taking the same fee as a servicing IFA providing advice but providing no advice.

Although retired, I do not immediately need to draw on this personal pension pot now, but may wish to do so in the next few years (2-5) and appreciate that I could take 25% of the fund tax free anytime if I wish. My knowledge on pension funds is not great and I really wanted to have some advice on low risk funds, with low charges if possible and am not looking for fantastic growth, but security short term.

A SIPP is really for an experienced investor who is able to choose their own funds - are you sure this is really for you? Losing £30k over 10 years suggests it might not.

Perhaps you would be better seeking advice from an IFA?

Gatser

Many people are in the same situation... wanting the flexibility of a SIPP/Drawdown but not too many risks.

I have been researching SIPPs/Drawdown for a few years (and continue to do so!)
There is no one perfect product (no surprise)

I would agree with jem16 about HL.
I would not rush to HL either.

Would you consider buying GILTS through SIPPDEAL?
or lower risk funds through the Skandia Personal Pension (which offers drawdown and around 1000 funds to choose from) ?

I am currently looking for SIPPs that will hold National Savings products as they are very low risk.

Any more ideas?

SeniorSam

I would like to have advice on funds, but appreciate that IFA's cannot/does not give this, even though they may have the answers. I feel that I would be paying for something that I cannot obtain. You have helped me understand that there is a 0.5% AMC not refunded with HL, but again, the IFA does not recommend funds or actually 'service' the investment as far as I can see, I wish they would.

I made the move to SIPP on the basis of what I thought was a better way to invest for the future particularly for my wife. I was then and am now not very astute regarding funds and the advisers who I dealt with were aware of this. I now simply need low risk funds at my time of life and am seeking guidance on this if possible.

Sam

SeniorSam

Thanks Gatser,

a few ideas worth considering. HL were a consideration but am open to considering others that may be able to help. As I said, I don't want high growth (some is always welcome), but security is my aim now and I just did not like the sound of penalties being heaped on my pension fund by James Hay, so feel I need to move it. Skandia's 1000 funds doesn't interest me as I know full well that many are higher risk.

Sam

jem16

SeniorSam wrote: »

I would like to have advice on funds, but appreciate that IFA's cannot/does not give this, even though they may have the answers. I feel that I would be paying for something that I cannot obtain.

I don't understand your comment on this. An IFA's remit is to recommend funds - mine certainly does.

You have helped me understand that there is a 0.5% AMC not refunded with HL, but again, the IFA does not recommend funds or actually 'service' the investment as far as I can see, I wish they would.

Do you have a servicing agreement with your IFA?

I made the move to SIPP on the basis of what I thought was a better way to invest for the future particularly for my wife. I was then and am now not very astute regarding funds and the advisers who I dealt with were aware of this. I now simply need low risk funds at my time of life and am seeking guidance on this if possible.

Sam

To be honest I feel it's time to look for a new IFA.

jem16

SeniorSam wrote: »

Skandia's 1000 funds doesn't interest me as I know full well that many are higher risk.

Sam

There are also many that are not. Why discount them?

SeniorSam

jem16,

The number of funds a company has is not the issue, I want only low risk funds and that can be with any company.
I have known a number if IFA's who state that they cannot recommend funds, only give generic advice, an outline of certain risks and it's up to the client to select the funds. I do not have an IFA now as the last one let me down, being interested in commission on the transfer and I was not supported by a complaint.

That is all in the past. Now I need guidance on sound funds of low risk either with HL, or another Sipp provider that doesn't take big charges initially.................. some fee would be considered. Can you or anyone else help?

Sam

dunstonh

I would like to have advice on funds, but appreciate that IFA's cannot/does not give this, even though they may have the answers.

IFAs are required to give advice on funds. FAs (tied, multi-tied/panel) are not required to give advice on funds but present options for you to choose. Any "IFA" that will not give advice on funds is either not an IFA (over half those that see FAs think it is an IFA they are seeing - research about 2 years ago) or they have insufficient information about you to be able to make a recommendation or you are not willing to pay for that sort of advice (advice on funds still requires "know your client" and have an audit trail as to why you are recommending them and their suitability) or you are using investments in the SIPP which are outside the scope of permissions for the IFA (single company shares or non FSA authorised investments for example).

Now I need guidance on sound funds of low risk either with HL

Ask HL. You are paying for advice if you use them so you may as well ask them to give you advice.

Skandia's 1000 funds doesn't interest me as I know full well that many are higher risk.

On that basis you would need to rule out HL, James Hay and every other fund platform/SIPP going as they all use the same investment funds. If you are not willing to use investment funds, this may explain why an IFA is unable to give you fund advice.

DavidHayton

Hi Sam,
£250k is a lot of money! It may be wise to consult a (different) IFA who can assess your risk profile, select some suitable funds, and identify the most convenient and cost-effective platform.

One option - if you are risk averse - is to take the pension now. If you don't need the money, you don't have to spend it. The 25% lump sum would raise £62,500 which can be invested in whatever you like. National Savings certificates are rumoured to be reappearing shortly: can't get much safer than them. Meanwhile the pension can be fed into regular saver accounts/ISAs. However the actual income is taxable so do consider the implications.

If you do decide to take the pension make sure that you shop around. Your present provider is unlikely to offer the best annuity rate.

David

jem16

SeniorSam wrote: »

jem16,The number of funds a company has is not the issue, I want only low risk funds and that can be with any company.

Yes that's why I asked why rule out Skandia if they have low risk funds as well as high risk funds?

What funds are you currently using in your SIPP?

I have known a number if IFA's who state that they cannot recommend funds, only give generic advice, an outline of certain risks and it's up to the client to select the funds.

Perhaps as Dunstonh suggests they were not IFAs.

That is all in the past. Now I need guidance on sound funds of low risk either with HL, or another Sipp provider that doesn't take big charges initially.................. some fee would be considered. Can you or anyone else help?

Sam

Does it have to be a SIPP?

What exactly do you mean by low risk funds?