Managed SIPP for flexible drawdown

tallmum

I am in the fortunate position of being able to enter flexible drawdown on a personal pension (I will be in receipt of £20k pa from occupational pension) - I currently have £280k invested in Scottish Widows funds via a financial advisor and would like to spend this over the next 10-15 years (taking ~£20k pa). I know I will need to move from Scottish Widows as they do not allow flexible dd and will end up with costs for the transfer as well as ongoing advisor fees.

I have just had a meeting with a rep from Close Brothers who would like to look after my funds, can accommodate flexible drawdown, and propose putting the funds into a managed portfolio (balanced to my level of risk) - charge for this is 3% up front then 1%pa management and up to 1%pa for transaction fees.

The proposal seems attractive as I have been assured that the investments would be actively managed rather than my current arrangement where my pension funds are reviewed annually and modified. I do however feel I have a good relationship with my current advisor and so was not looking to move.

Does anyone have experience of Close Brothers? Are the managed portfolios really actively managed? Are the costs proposed reasonable? (Sorry for being long winded!)

dunstonh

The proposal seems attractive as I have been assured that the investments would be actively managed rather than my current arrangement where my pension funds are reviewed annually and modified.

That is mainly because one is advisory and the other is discretionary. However, advisory costs tend to be lower. Do you need discretionary management?

xylophone

https://select.bestinvest.co.uk/sipp/what-is-a-sipp/compare-sipp-providers
http://www.hl.co.uk/pensions/sipp?theSource=PCSG&Override=1&gclid=COSuo9CXwLMCFW_KtAod6CcArQ
http://www.cavendishonline.co.uk/pensions/self-investing-personal-pensions/

Etc Etc - a good idea to do some research?

tallmum

Thanks for the comments

I dont know if I do need discretionary management (eek!) - the sales pitch is that having a managed portfolio (Close Brothers) may be safer (provide better outcome?) as they will be able to respond to moves in the market (ie jump out or in of sectors) more quickly than now where I have an anuual (or if I request it more frequent) review of the pension which is spread across a range of funds and means I could be exposed if there's another sudden drop (I know there's always going to be a risk if I want to get a reasonable return and am prepared to accept this)

I'm happy to pay for good advice (I'd rather pay a reasonable fee and get a good return than pay a minimum and then get poor returns) - just not sure if the Close Brothers rep is a salesman overstating the benefits to me if I move from the current advisor and the annual review approach.

Although I think I'm reasonably savvy I don't really want to take the risk of selecting my own funds for the SIPP (I have a small S&S ISA which I manage myself)

xylophone

See an independent financial adviser?
http://www.unbiased.co.uk/pensions

tallmum

I do currently have an independant financial advisor (and have been happy with her advice) - I'm just wondering now whether the managed SIPP may provide a better solution for my pension (and if the company is reputable/fees are reasonable)

dunstonh

I dont know if I do need discretionary management (eek!) - the sales pitch is that having a managed portfolio (Close Brothers) may be safer (provide better outcome?) as they will be able to respond to moves in the market (ie jump out or in of sectors) more quickly than now where I have an anuual (or if I request it more frequent) review of the pension which is spread across a range of funds and means I could be exposed if there's another sudden drop (I know there's always going to be a risk if I want to get a reasonable return and am prepared to accept this)

A sudden drop occurs because it is sudden and too late to react. Discretionary management does allow daily movements (and more dealing costs) and some people may like that. Indeed, some IFAs use it for their clients. However, dont buy into sales speak that indicates they can move things around outside of your risk profile and guess what is going to happen. No-one can do that.

tallmum

dunstonh - thank you for providing the clarity i needed (as you do for so many!) - I think i'll stick with my existing IFA whose advice has served me well over recent years!