First Pension - Alternatives to being pushed to SJP?

David8686

Hi all, as usual when I'm feeling confused and at the end of my tether off I run to the MSE forums.

I'll try to keep it concise, I'm 28 years old, self-employed and looking to start my first pension up in the next few weeks.

I freely admit I don't know anywhere near enough about pension investments to do it myself through an SIPP, but I do know the general risk profile I'd like my pension to have as well as knowing I'd like to avoid managed funds as much as humanly possible. Assuming there will be people that disagree but I'm not trying to beat the system and pay high fees to flash fund managers, I'd be more than happy putting my few hundred a month into a tracker fund or some sort for the next 20-odd years.

My accountant has referred me to an St James Place adviser, who i've spoken to on the phone a couple of times and he's told me obviously they only do managed funds. I know a lot of people say these guys are among the worst value for money around and that their fees will often eat well into any increased returns they'll get you on your investments.

Do you smarter ladies & gents think I really need to get a completely Independent Adviser? Will they be able to hold my hand right through to opening my account in a low-cost pension? Then i'm guessing it's up to me to be mature and re-visit the IFA every few years to check on my pension and possibly change things up?

I'd really appreciate any replies on this as I'm kind of confused/stressed and I'm due to speak to the SJP fellow again in a few days.

Thanks in advance!

Dave :cheesy:

atush

First of all you could use an IFA try unbiased.co.uk

But, you could also DIY using cavendish online and choose a pension platform that has a range of low cost trackers (never just one tracker please! as you need global not just uk exposure) or a range of lifestyle funds (funds that invest in a % of equities and a % of bonds/gilts). This last one might be better for an invest and forget strategy.

Once you get say 20K under your pension belt you could then consider hiring an IFA?

dunstonh

My accountant has referred me to an St James Place adviser, who i've spoken to on the phone a couple of times and he's told me obviously they only do managed funds. I know a lot of people say these guys are among the worst value for money around and that their fees will often eat well into any increased returns they'll get you on your investments.

I didnt know accountants were allowed to refer people to tied sales agents. The historic position was they could only refer to IFAs or those representative of the whole of market. SJP do not meet either criteria. Although if yours is a book keeper rather than accountant, then they dont have that issue.

Do you smarter ladies & gents think I really need to get a completely Independent Adviser?

SJP only retail their own product range. No trackers. They are one of the most expensive distribution channels going. So an IFA or whole of market restricted adviser would be much better than SJP.

David8686

Atush - I did look into doing it myself before and read much of the same advice you gave me regarding spreading your tracker funds out etc.

I then kind of had a moment where I thought it's a big enough investment and it's important to realise where your gaps in knowledge are! e.g. stop being so pigheaded and see a professional before you go putting money into a personal SIPP type thing. Although I have to admit a part of me would consider going alone, then going to an IFA once i've invested a small amount.

Dunstonh - While his company do my books (for £110/month...) the individual who actually sent me the email referring me to the SJP adviser is my accountant and deals with all my tax submissions/dividend recommendations etc. Maybe I need to have a word with him!

Thanks a lot both of you

atush

I wasn't advising you use a sipp (which is for experienced invoestors who want to use assets that other pensions can't)

I was suggesting a personal pension in a platform that uses low cost tracker sna d lifestyle funds.

This is a completely different thing.

David8686

Atush - my apologies I got mixed up there, my head is a little fried today. I realised what you meant regarding using a different platform, e.g. SJP uses high cost managed funds, Cavendish is a much lower cost platform that uses many tracker funds etc.

Thanks again. Going to look into Cavendish today. From what i've read so far I like the look of it a lot more, seems exactly the type I was after and appears a lot more transparent.

atush

Cavendish isn't a platform, but a supermarket that links you to platforms that might be suitable.

_pete_

I was in a similar position to David8686 a few months ago. I got rid of my previous IFA because of the poor quality of his service and seriously thought about going it alone. A few people on this site suggested that might be a bit risky given my lack of experience, how close I am to retirement and the size of my pension pot. I'm now at the stage where with the help of a new IFA I've nearly completed the transfer of my funds to a new, lower cost arrangement. I learned 2 main lessons from the process:

1. Do your research. I read a couple of books on pensions and investing, and did a fair bit of internet research. Even though I didn't understand all of the material, my reading helped me arrive at a clear understanding of what I wanted - a passive approach relying on a diverse range of index trackers with low charges.

2. Choose your IFA carefully. I phoned 5 and met with 3. I asked them some pretty pointed questions over the phone - 'how much would you charge to review and transfer my funds?', and 'what's your view of a passive approach to investing?'. I found that having done my research and knowing what I wanted put me in a strong position when discussing my needs.

I'm glad I used an IFA - partly for the peace of mind of having someone else confirm that my approach was sensible, and partly because of the time-consuming legwork involved in managing all the paperwork. I could probably have done this myself but not as efficiently as someone who has done it many times before.