SIPPS - own choice or IFA ?

dunstonh

jawa1 wrote:

To get the 80 funds via Scottish Widows you have to go through a IFA and it's only 80 funds.

Skandia 300+ funds.
I cannot make my mind up between Skandia and SIPP.
The thing what really annoys me about Skandia is they don't give you the AMC / TER in the fund ranges brochure.

Skandia have two versions of their pension. Known as a PP5 or PP6. Or as Initial charge pension or single price pension. The only real difference is the method of charging. The PP5 has a 5% initial charge and an AMC of 0.75%. There is a loyalty bonus of 1% every 5 years from end of year 4 on single contributions. This version is very good for those with more than 19 years to go until retirement and make single premiums.

The PP6 I rarely use as most of my business is single premium and the PP5 illustrations beat it every time. However, the charge on that one does drop from 0.75% to 0.25% on funds over 75k (i think its 75k).

On top of those charges for both versions you then get the fund charges which range from 0.15 up to 1.95(ish).

I do have access to the funds brochure which you don't which lists all the charges for each fund. PM me with your email address and I will email it to you. I dont think they make it available to the public as their product is IFA only.

I have my pension with Skandia on the PP5 version. If you decide to go down the Skandia route then you should be able to get it discounted. Personally, I tend to set up the PP5 on no initial commission and just take the 0.5% trail. This gives the policyholder 103.15% allocation on their contributions. So that is what you should be aiming for.

paul666

Low cost online Sipp almost certain to be a much better deal than Skandia on charges for the same fund choice.

Stakeholders unfortunately usually don't offer much in the way of the better performing funds and their charges are now going up to 1.5% pa.

With a lowcost SIPP you pay higher setup fees at the start and then a fee to buy the funds/shares.But if you just hold them, without trading, after that your annual fee is nil ( other than the compulsory -and silly - Govt illustration), so you soon recoup the startup costs.

So over time it's a much better deal.

Oh and the service is so much better you will never ever want to go anywhere near a life insurance company again.

Sigh... another SIPP zealot.

firstly, not all SIPPs are the same, some have annual charges, some don't.
secondly, some stakeholders will go up to 1.5% amc, the good ones won't.
thirdly, 95% of people wouldn't have the first idea about what to choose to buy in a SIPP, and if they are just going to buy a tracker then they might be better off in a stakeholder.
I'm not saying you're wrong in every case but not *all* roads lead to a SIPP ok?
I suppose, yeah, *charges wise* anything's going to beat an IFA only product, but that's not always the only story for everyone.

EdInvestor

Sorry, I was replying to the original poster, who said:

I thought before that you couldn’t set up your own SIPP but had to go through an IFA - I believe that this isn't the case ? I really want to invest in some retail funds and keep costs to a minimum - anyone else got any ideas ?


Clearly he's been wrongly informed.A cheap low cost SIPP is ideal for him as it will give him access to a large choice of the best funds, most with charges discounted/rebated, keeping costs to a minimum.No need for an IFA. Exactly the right way to go for a person trying to save in a pension with no company contribution.

I don't think Skandia can compete on charges, do you? It refuses to supply details of its charges to the FSA's official site, so we can draw our own conclusions from that.

Of course all SIPPs are not the same, but if you stick with the online ones, you shouldn't go far wrong on the cost front.

dunstonh

Skandia can provide a reduction in yield of only 0.7% depending on the term and funds chosen. That makes it cheaper than most stakeholders which show 1.1% reduction in yield. And that assumes Skanida on full commission.

They are an IFA only product and like most IFA only products, the information is available through IFAs.

So, Skandia can compete and does.

Shrimp_Stu

Thanks to all who have posted on here.

For an update - I settled with the IFA for £250 (the minimum fee) and am now beginning my search again - I should really get a PPP sorted out asap - I think I may just take out a Stakeholder and then fully research my own requirements for a SIPP.
I imagine that when I wish to transfer to a SIPP that the transfer fees from a stakeholder can be high?

dunstonh

transfer fees from a stakeholder to a SIPP are zero. Hence why i suggested dealing with a stakeholder initially until you feel ready to move into a SIPP.

For reference, Skandia have just launched a new SIPP. It appears to be a white labelled version of the Sippdeal SIPP but with improved terms when using the Skandia fund range.