SIPP Advise please

Bosun

Hi, I have a few small personal pensions and am keen to make the most of these to help secure mine and my families financial future.

I am a small property investor as well as holding down a full time job and have recently been considering consolidating these individual pensions into a SIPP with the idea of investing some or possibly all of my fund into Commercial property. I have had a review done by the Attivo Group and these pensions total around £150k.

They are recommending I amalgamate all these pensions (some of which have performed very poorly) into a SIPP which is invested in a medium risk fund. The idea is then to try to find a suitable small single property to buy, or possibly invest with a group of others in a bigger commercial property (this option seems to me to perhaps be a little safer) where I should get a reasonable return and hopefully some capital growth. I might consider splitting the money into maybe half commercial and half equities.

The transfer charge seems perhaps a little high at 3% with a £495 annual SIPP fee and then a 0.5% annual advice fee.

I would really welcome any comments regarding this strategy and also specifically whether anybody has any experience with this company please and whether these charges are the norm?

bigbloke45

A SIPP is a Self Invested Pension Plan ie. where you make your own investments.

A medium risk FUND is managed by others for a fee and, I suspect, the advisor gets a commission for their recommendation which may well account for the transfer "charge".

It doesn't seem to be a "strategy" to me. If your'e not ready to self invest, then why set up a SIPP? Doing nothing is also an investment strategy and this may well be your best option until you have more of an immediate plan

dunstonh

If your'e not ready to self invest, then why set up a SIPP?

Most of the unbundled platforms have moved to SIPP now. It's just the way it is trending. The bundled platforms are split between SIPP and PPP. It got to the point where there wasnt a lot of difference so you may as well go SIPP>

The transfer charge seems perhaps a little high at 3% with a £495 annual SIPP fee and then a 0.5% annual advice fee.

3% is high unless there is an occupational pension involved. If its all money purchase then you can get lower than that. 0.5% p.a. is the norm. SIPP fees vary. I tend to use SIPPs with no SIPP fees. However, if your intention is to go into commercial property, then you are better off being more selective on the SIPP to have one that is more suited to that and they typically do have fees.

Neverland

Their charges are incredibly high for a SIPP investing in stocks, bonds and funds

I pay less than half that proposal annually in my self invested SIPP and its a bigger fund. My provider charges a nominal £50 to open an account

However, if you want a fund that can hold commercial property you will have to pay a lot more than basic DIY SIPPs for every element of the SIPP: admin fees, management of the property, set-up of the property investment

CannySaver_2

Hi

A few points:

1. Depending on how long the gap is between transfering your pensions and investing in a commercial property I would question whether you should be invested with any exposure to a fund which could have volatility. Let's say you invest now in the "medium risk fund" only to decide to buy a commercial property in 6 months that fund could have risen or fallen in value, if it falls you could end up having to buy a smaller property or indeed borrow money to cover the shortfall. Personally, if I was thinking of buying a commercial property within the next 1 - 36 months I would only be holding cash. That then opens up a debate as to whether you use a PP / SHP and a provider's cash fund or use a SIPP and invest in SIPP deposit accounts a range of which are given on the link. Personally, given your fund size, I would go for the SIPP / Deposit account option

2. If you do decide to go for a "medium risk fund" or indeed funds I would suggest you need to comapre the costs of a SIPP v a Personal Pension to see which is cheaper

3. That then brings us on to fees, lets focus on setting up a SIPP for commercial property purchase.

The cost of advice and the cost of the SIPP need to be seperated from each other.

Personally I would recommend seeing an IFA who charges their fee based on an hourly rate and preferably capped. To review existing pensions, recommend a SIPP and facilitate a property purchase (assuming the purchase is simple with no borrowing to arrange) I would suggest an IFA charging a fixed fee of £1,250 - £1,500 would be reasonable. No need to charge a percentage, it should be based on the actual work that they do. There should also be no annual percentage to the IFA for a SIPP property purchase, simply pay the hourly rate if you need them.

Regarding SIPP fees, these vary considerably from provider to provider. Some charge no initial fee, others charge an initial fee but nothing for property purchase, others charge an annual fee for the SIPP and holding a property, others don't. It can be a bit of a mindfield.

However, I believe Attivo own mysipp (is this the one which has been recommended?). If so you can compare their SIPP property charges with other SIPP providers here:

http://www.!!!!!!.uk/sipp-zone/sipps/

There are providers who offer a great service, won't charge the earth and base everything on fixed fees, it is these I would personally consider for SIPP property purchase.

I hope this helps.

The Canny Saver

Bosun

Thanks for all the replies - especially CannySaver. I have been recommended to Attivo through a 'friend' who will almost certainly be getting a kick-back from them.

I would really like to hear which providers you would recommend CannySaver as you obviously know far more than me!

I agreed to the transfer on Thursday and signed all the forms but am now going to e-mail and put this all on hold temporarily until I have sought further advise.

Thanks again and any further input welcome!