Cheapest Sipp: build yourself a low cost DIY pension article

dunstonh

I am looking for a SIPP administrator that will allow me to invest in relatively safe if not boring funds. Most want to only allow from there own list.

Every SIPP provider should meet that criteria.

I have been looking at 3-6 year funds with Barclays, Legal and general, Investec, Gilliat etc.

It appears you are not talking about funds but structured products. You do realise that these are not relatively safe (typically range from cautious to medium risk). Also, the guide is that you should not place any more than 25% in structured products with no more than 10% with any one market counterparty.

Yes you can hold these in SIPPs but if your intention is to hold the majority then that would be quite risky.

Switchking

Every SIPP provider should meet that criteria.

Have contacted a couple now and all have said they would not entertain this type of holding as they were external to their lists. H&L a prime example.

Also, the guide is that you should not place any more than 25% in structured products with no more than 10% with any one market counterparty

.

Had never seen this as a guideline before but it makes a lot of sense. Initial thought was to use these to get the initial amounts plus tax relief invested somewhere then look at a long term strategy.

Aegis

Switchking wrote: »

Have contacted a couple now and all have said they would not entertain this type of holding as they were external to their lists. H&L a prime example.

.

Had never seen this as a guideline before but it makes a lot of sense. Initial thought was to use these to get the initial amounts plus tax relief invested somewhere then look at a long term strategy.

HL is a "low cost" fund supermarket based SIPP. If you're looking to access structured products you probably need a wider-reaching SIPP, which is going to be more expensive to run. Are you going to be transferring a significant amount into this pension plan and are you happy with fees potentially around £500 a year to run it?

gadgetmind

Aegis wrote: »

If you're looking to access structured products you probably need a wider-reaching SIPP

Does any SIPP allow holding of structured products?

SIPPs are (generally) for investors who have clue.

Structured products are for salesmen who have found a clueless investor and have connected up the milking machine.

Aegis

gadgetmind wrote: »

Does any SIPP allow holding of structured products?

SIPPs are (generally) for investors who have clue.

Structured products are for salesmen who have found a clueless investor and have connected up the milking machine.

You can certainly hold structured products in some SIPPs. They're certainly not for me, but some of the institutional ones are worth holding for more cautious investors. They can be useful for lower risk investments designed to use capital gains tax allowances in direct portfolios too.

Generally speaking the ones you see peddled by banks are atrociously bad.

dunstonh

Had never seen this as a guideline before but it makes a lot of sense.

It was published in the FSA thematic review on structured products are few years ago once it became known that the products are not covered under the FSCS.

Does any SIPP allow holding of structured products?

Yes.

Structured products are for salesmen who have found a clueless investor and have connected up the milking machine.

That is why banks love them.

gadgetmind

Aegis wrote: »

They can be useful for lower risk investments designed to use capital gains tax allowances in direct portfolios too.

My novice approach would be to hold ITs and/or direct equities, either those with high yields, or those that roll income into capital gain, but what do I know? So, high yield (the usual suspects of equities, ITs and funds) for a basic rate tax payer, or low yields (CGT, PNL, RCP, etc.) otherwise.

However, I guess these approaches don't spit out fat commissions.

gadgetmind

dunstonh wrote: »

That is why banks love them.

While I agree with you (no, really!) I wonder what bank FAs say about IFAs? And yes, this is a serious question.

dunstonh

While I agree with you (no, really!)

I think we do more often that not. Even when we dont, at least you are one of the level headed ones that considers debate and can usually see the constraints that may apply to regulated advice that do not apply to DIY.

I wonder what bank FAs say about IFAs? And yes, this is a serious question.

Research has found that over half the people that see tied agents actually think they are seeing an IFA. So, a good proportion pretend to be IFAs. Others are taught by their employer to slag IFAs off. e.g. not really independent etc. The most common one is to say that if you use an IFA they will charge you for their advice but if you get it from the bank it is free.

Aegis

gadgetmind wrote: »

My novice approach would be to hold ITs and/or direct equities, either those with high yields, or those that roll income into capital gain, but what do I know? So, high yield (the usual suspects of equities, ITs and funds) for a basic rate tax payer, or low yields (CGT, PNL, RCP, etc.) otherwise.

However, I guess these approaches don't spit out fat commissions.

Believe it or not, the commission makes literally no difference to me in such cases because it's all rebated in exchange for a flat management charge. Hence why there would almost always also be equities, bonds, gilts, investment trusts, unit trusts, OEICs, ETFs and cash instruments in such a portfolio.

Come on, don't start sounding like all the other IFA bashers on the forum at the moment, you're usually much better than that.