SIPP Advice Please - how well is mine doing?

jamesd

My first share purchase was more than a quarter of a century ago.

Loughton_Monkey

Bosun wrote: »

.....So, my question is firstly whether my fund is 'doing OK' and also whether there are any 'league' tables for pension funds that compares performance after charges over say 1, 3 & 5yrs etc. If I can find a provider that consistently seems to outperform others I would be happy to switch and am happy to pay high charges if the fund performs well above average - Any and all comment appreciated!

Although well meant, I'm sure, the question is meaningless. Like asking 1,000 to transport themselves exactly a mile over a road and report how quickly they did it. It depends upon whether we own a bike, a car, a super-car, or rocket powered race car. It depends upon whether the road is sand, tarmac, gravel, or rock. It depends whether the road was secure, or whether hoards of children were walking to school. It depends upon the degree to which we drove like a bat through hell or drove like our granny.

In constructing a portfolio, 100 people will have 100 different ideas. Is China going to do better than UK and India? Will Europe out-perform USA and will smaller companies be better than larger? How volatile can I afford to be? Even when you've decided to be in smaller European companies, then will Threadneedle be better than Invesco Perpetual or is JPM going to be better?

If you had put 100% of your funds in (say) Axa Framlington Biotech you would be looking at almost trebling your money over three years. Conversely, putting it into Gold funds would have lost you two thirds of it. But putting 100% into a single narrow-focus fund (even if you had chosen the Biotech) would have been a rather stupid thing to do at the time.

My own approach is 'simply' to keep abreast of world economic events and make decisions on 'where I want to be' both geographically, and/or focus, volatility and risk, and continually refine my funds (20 or so in my case) to match a good spread across my desired exposure. The main extra thing I do, is when I have decided upon a new (say) 'absolute' fund, or a 'UK smaller company' fund, I carefully review past performance on Trustnet and tend to go with the provider with some track record in that area. Personally, I feel competent to do it myself, and live (or die) by my own decisions. Others find this difficult and invoke a FA who will do similar things [maybe better, maybe not]

wotsthat

Bosun wrote: »

So, my question is firstly whether my fund is 'doing OK'

For the last three years to date my return, after all charges, is 12.68% per annum. If it had been minus 12.68% I would have let your question slip away without comment - you're inviting in a success bias that will only lead to paranoia.

I know the rate of return I 'need' to achieve my target (upsized house and downsized job when I'm 55 followed by a retirement of no later than 60). Let's say I need a real return of 5% p.a. - that's the starting point - if you don't know that then you're drifting without a plan. It allows an early sense check because if I needed 15% then that's an indication my plan is probably unachievable unless it's scaled down or savings rate dramatically increased.

Bosun

Sorry for the tardy response but thanks to all for the replies. Like most folk I guess I find the whole pensions thing a bit of a minefield and just want to do the best I can for myself and my family without lining the pockets of unscrupulous fund managers!


I realise SJW aren't the cheapest option but was a little intrigued when my friend mentioned 11% per annum returns! I have now been looking a little further into my own pension and now realise (DOH) that my provider has kindly included the £8k investment I put into an ISA in Sept 2013 (grandparents gifts to the kids) in with my 'portfolio'. This means that my pension has made £8k less that I thought it had, which has effectively reduced the growth I thought I had made from my initial investment in Apr 2012 some 3.25 years ago to 18.2%. This gives an average of 5.6%pa although I guess the annual rate is even less due to compound growth.


Now I am seriously not happy and actively looking to move provider, particularly as the total charges with this company are around 2.17%pa. I did meet with an IFA a little while ago who suggested I transfer my funds via him to a Royal London Governed Portfolio 5 fund. This would entail an initial charge of 0.75% for the transfer and an ongoing charge of 0.9%pa. This seems to have performed reasonably consistently (compound annual growth rate over 5yrs of over 8%) over the last few years Does anyone know if I could go to RL directly to avoid the transfer charge? Any views on this would be most welcome!

dunstonh

Now I am seriously not happy

Why are you not happy?

i suspect you still dont understand risk vs reward. At no point on this thread have you stated whast your investments are (so we can see the risk profile) vs what your risk profile is vs what your friends is. Comparing a low risk portfolio with a high risk one in a limited period that only has growth and no negatives will automatically result in the higher risk one being better.

actively looking to move provider,

The provider isnt the one that makes or loses money. The funds do that and most providers have a wide range of funds.

I did meet with an IFA a little while ago who suggested I transfer my funds via him to a Royal London Governed Portfolio 5 fund.

Good provider and good investment options and low cost. Ideally suited to an investor that doesnt know what they are doing.

Does anyone know if I could go to RL directly to avoid the transfer charge?

No

atush

We cant tell you if your funds are doing ok, nor can your ST James pal (imbecile? Scammer? Hard to say).

As you dont say WHERE you money is invested? In what funds/asset classes, market etc?

The only way to see if you have 'done well' is to compare your chosen funds with their appropriate 'index'. Which we cannot determine (nor can your STJ 'pal') as you dont say where your funds have been invested.

We have done slightly better, as our 'funds' have been invested perhaps in more volatile investments. But that strategy would just bring you bigger falls in a correction perhaps.

So basically your question cannot be answered from the information provided.

SandLake

I came accross this thread when I myself am looking for an IFA, looking for a good manager for a £100K pension fund I can access.

I find this thread biased towards the financial industry, I can sympathise that we are currently in a difficult time for IFA's (regulation/freedoms/climate) but as a member of the general public I have to enter this world, try to get up to some speed and decide on a course of action all before I get any financial advice.

I think the OP initial question was a good question - I think the subsequent responses have been entirely fair. However in reality I feel that the OP has been reprimanded for not having done enough of the correct research in order to ask a more astute question.

Employing an IFA is not the first step, nowadays the Internet is a learning tool to get you to the point where you can make an 'informed choice' on an IFA or investment route.


Is 7% after charges a good return?
It's more than you would get in a bank. It's probably better than a safe investment. It's probably in the range for a medium investment and worse than a high risk investment - that is my analysis as a member of the general public. Maybe someone in the financial industry or a close follower of the financial industry might have a better insight - or maybe could show a link towards an article or web page that has a summarised explanation (hopefully it won't be a DM article!).

Radiantsoul

SandLake wrote: »

Is 7% after charges a good return?

It depends. It depends on the timescale, the level of risk, the currency.

Loughton_Monkey

SandLake wrote: »

.......I find this thread biased towards the financial industry, I can sympathise that we are currently in a difficult time for IFA's (regulation/freedoms/climate) but as a member of the general public I have to enter this world, try to get up to some speed and decide on a course of action all before I get any financial advice.

A curious thing to say?

If I had a minor medical problem and asked a question on a medical forum, I would expect the bulk of replies to come from people with a bias towards the medical profession!

Unless you mean 'biased' as in "for" the Financial Industry, and "against" the general public? But this has no meaning as it's not an "us or them" situation. Anyone asking things here will get answers from a wide range of knowlegable people. IFA's generally disclose their profession. Others work for providers. Many are just experience investers and throw in their own ideas.

SandLake wrote: »

.......I think the OP initial question was a good question - I think the subsequent responses have been entirely fair. However in reality I feel that the OP has been reprimanded for not having done enough of the correct research in order to ask a more astute question.

If the OP has been 'reprimanded' at all [??] it is/was for a very common thing. OP's tend to come here and ask "How long is a piece of string?" Responders then try to be helpful by asking if it's thread, twine, rope.... or if he has this piece of string or merely thinking of buying one.... or suggest that a tape measure could partly assist in getting the question answered....

.... and so often, the OP then fails to answer any questions cogently, or fails to give any facts or clarification.

SandLake wrote: »

.......Employing an IFA is not the first step, nowadays the Internet is a learning tool to get you to the point where you can make an 'informed choice' on an IFA or investment route.

I agree.

But surely this forum is part of the "Internet" and part of that learning process? I do not detect any 'bias' towards IFA's [as in "you need to go and see an IFA"]. This particular thread is not, in my opinion, a particularly 'bad' one as things go. But like doctors, if you go with a vague question [I have a pain] then you must expect the doctor to ask a few questions like where? what type of pain? for how long? What's your occupation?..... When a patient (as some do on here) will not answer the questions, will not even point to the pain, and perhaps is looking simply for confirmation that he should qualify for sickness benefit, then I'm not surprised they get reprimanded.

dunstonh

I find this thread biased towards the financial industry, I can sympathise that we are currently in a difficult time for IFA's (regulation/freedoms/climate) but as a member of the general public I have to enter this world, try to get up to some speed and decide on a course of action all before I get any financial advice.

I have had a look at the content and dont see it. The topic is about a SIPP and SIPPs are for experienced investors looking for more advanced options. So, you would expect to knowledge to be higher. However, I just cant see any bias to the industry. indeed, the tone is a little against SJP (who are not IFAs and expensive).

Making a decision before seeing an IFA is silly. An IFA is there to make the decisions for you. If you are making your own decisions then why would you use an IFA?

I think the OP initial question was a good question - I think the subsequent responses have been entirely fair. However in reality I feel that the OP has been reprimanded for not having done enough of the correct research in order to ask a more astute question.

The questions are there to make the OP think about things. Something that is important when you use an advanced product/investment and make your own decisions.

Is 7% after charges a good return?

it depends. Context is needed. However, context never came.

The OP posted a month ago and has been very rude and inconsiderate by not returning to the thread. Although maybe its because they have realised that they dont know what they are doing and have decided to crawl away and keep quiet rather than join in the discussion they started and try to learn and understand.