Guaranteed rate SIPP?

Ticksy

I'm with Standard Life at the mo, the return has been slow as I haven't touched it in years, and the projection is around 2.5%.

So you're saying that with a non-adventurous approach I could probably get 5%? Am I better off finding and approaching an IFA independently?

sandsy

The projection of 2.5% with Standard life is almost certainly after inflation of 2.5%, so 5% in total in monetary terms. The regulator doesn't allow firms to exceed 5% for their mid-rate projections.

jamesd

What funds are you using with Standard Life? I suppose the default fund, which is probably their Standard Life Managed Pension Fund, which is of a type generically called Balanced managed. Those are in general aimed at those who would be scared by normal share market drops of 40% once or twice a decade and 20% two or three times a decade. To reduce the size of those drops they mix in some bonds, the trouble is that reduces the growth rate.

As sandsy wrote, what SL are using is a protected return using FCA rules, not the real historic return. Even if you were in a FTSE All Share Index tracker fund SL wouldn't be allowed to use its historic growth rate but would have to use a lower one.

Your SL product undoubtedly allows you to pick from a range of investments.

The sort of thing you should be using as a core investment is the "Standard Life World Ex UK Eq (BlackRock) Pn Fd", a global tracker fund with a 33% US+EU, 17% jap+apac weighting as its mixture. That weighting is deliberately different from the world stock market size weighting. If you want that you could use their SL Vanguard FTSE* Developed World ex UK Eq Idx Pn, which is only the developed countries, so no emerging markets countries but this one has a 61% US weighting, which I think is currently too high to be sensible given the prices of the US market at the moment. Two other tracker funds that might be of interest are SL Vanguard FTSE* Developed Europe ex UK Eq Idx Pn and Standard Life FTSE* Tracker Pension Fund. The last of those is the one that is tracking the main UK stock market with that historic 5% plus inflation return. That's before fees so about 4 to 4.5% after fees is what you might expect historically, depending on the price you have your SL product at.

I'll translate one of those names for you:

Standard Life World Ex UK Eq (BlackRock) Pn Fd

Standard Life or SL: it's a fund operated by SL.
World Ex UK: it's investing in the whole developed world, but excluding the UK.
Eq: using Equities
(Blackrock): it's really run by the firm Blackrock, SL's fund just invests in the Blackrock underlying fund. This is very common for trust-based pension schemes like the SL one.
Pn: Pension
Fd: Fund

These things are abbreviated a lot because there is limited space for fund names. The full names are in the factsheets I linked to. Those factsheets also give the past performance of the funds, though you have to be careful because that only goes back five years and that means that the big drops in 2008 aren't included.

Every fund I've mentioned here has an expected return higher than that of what the IFA has mentioned to you. That still won't stop SL from using the lower values in their projections. I have an SL group personal pension at work. The range of fund choices and charges are reasonable, it mainly takes a bit of exploring and learning to learn how to use them.

jamesd

Ticksy wrote: »

So you're saying that with a non-adventurous approach I could probably get 5%? Am I better off finding and approaching an IFA independently?

Yes. Yes. Unbiased.co.uk is the place to go to find IFAs or financial advisers who have a good approach but don't qualify as independent any more (they used to) because they don't consider every product type on the market, just every one in the market for the areas they cover. The posters here Aegis and dunstonh are examples of each type and both are highly capable people I'd be happy to do business with.

Whether it's worth using an IFA in part depends on how much money is involved. If it's up to say £20,000 it just wouldn't be worth it and the sorts of thing I've mentioned would be the way to go. On the other hand, I've over £80,000 in my work SL plan at the moment and at that size it's entirely fine to use an IFA because the charges aren't likely to be excessive compared to the value, particularly given the benefit of good advice for someone who isnt really very familiar with investing and needs help.

Don't worry if you don't think you know much about investments at the moment. I didn't either nine or so years ago and you can see it in the posts I was making here then. Just takes time and interest if you want to learn.

PeacefulWaters

Ticksy wrote: »

Just seen your edit. They cold-called me, and came to visit. They are covered by the FCA and protected by the FSCS, so I was happy to get advice. I was asked a series of questions and was quite adventurous in my approach, so when they came back suggesting an adventurous approach, I felt it reflected my needs.

I wonder what the FCA say about cold calling?

Ah, here it is:

1. Reject cold calls