SIPP Portfolio guidance??

Big_Dogg

Hello ladies and gents,

I'm after some simple advice or guidance.

I'm self-employed, 42 and in the process of transferring two pensions, a Pru Stakeholder and a Teachers Pension, into a Bestinvest SIPP. Fund value about £30k.

I'm a newb at this, so I'll say right now that I'm thinking "Woodford". Don't slate me! I'm sure it's a stage everyone goes through

Anyway, weirdly on the inter web I'm finding it quite hard to find any kind of basic guidance on what constitutes a balanced, diversified portfolio.

I'm aware this depends on attitude to risk, and mine is about medium-high. But part of me thinks, why shouldn't I just stuff the lot into Neil's hands and forget about it for 20 years? Isn't his equity income fund balanced?

And what's the difference between his equity fund and his WPCT? I know ones a fund and the other a trust, but at the end of the day they're both designed to make money, so what gives?

Kind of surprised I've not been able to find clear answers to these seemingly basic questions, so thought I'd come here and ask instead.

If anyone is feeling kind enough to respond, it'd be nice to have some idea of how to ensure my pension isn't overweighted before I start pulling the trigger and buying.

Thanks,

BD

greenglide

Are you really intending to transfer a teachers pension (a "proper" teachers pension is a DB pension) into a SIPP? Why? You need a good reason and need an IFA unless the total value is under £30,000. The value is not the same as the monthly / annual pension earned.

If you dont have a really good knowledge of investing, do you really think this is a good idea?

As to funds. The easiest thing to do is to look at a multi-asset fund with the split of equities / fixed interest that you would be comfortable with.

Mr Woodfords funds are generally too UK focussed to rely on alone/

dunstonh

I'm aware this depends on attitude to risk, and mine is about medium-high. But part of me thinks, why shouldn't I just stuff the lot into Neil's hands and forget about it for 20 years? Isn't his equity income fund balanced?

It would not be balanced and it would not be medium-high risk. Plus, moving a teachers pension scheme is not a very good idea for most people.

I'm a newb at this

So, instead of looking at solutions, focus more on comparisons with what you have and areas you feel could be improved and how they can be improved. Or recognise, some of things you have may not need improving as they are already good enough.

Big_Dogg

greenglide wrote: »

Are you really intending to transfer a teachers pension (a "proper" teachers pension is a DB pension) into a SIPP? Why? You need a good reason and need an IFA unless the total value is under £30,000. The value is not the same as the monthly / annual pension earned.

If you dont have a really good knowledge of investing, do you really think this is a good idea?

As to funds. The easiest thing to do is to look at a multi-asset fund with the split of equities / fixed interest that you would be comfortable with.

Mr Woodfords funds are generally too UK focussed to rely on alone/

Probably should have mentioned, the teacher's pension is small, just under two years' worth of contributions so I don't actually qualify being a month short. Value is just under £4,000.

I don't have a good knowledge of investing, but everyone has to start somewhere and a SIPP would just give me access to a larger range of funds than my Stakeholder, from which I've already picked funds, so not much difference there to my mind at least.

Aware Mr Woodford's funds appear UK focussed, but aren't his largest holdings multinationals?

Big_Dogg

dunstonh wrote: »

It would not be balanced and it would not be medium-high risk. Plus, moving a teachers pension scheme is not a very good idea for most people.


So, instead of looking at solutions, focus more on comparisons with what you have and areas you feel could be improved and how they can be improved. Or recognise, some of things you have may not need improving as they are already good enough.

Could you explain a little more how it wouldn't be balanced, and what level of risk it is?

To be honest, I appreciate what you're saying, but I can't follow your second recommendation without knowing what I'm looking for. Could you maybe point me in the right direction for some general research?

Linton

Big_Dogg wrote: »

east.

Aware Mr Woodford's funds appear UK focussed, but aren't his largest holdings multinationals?

UK quoted multinationals are heavily concentrated in particular areas. eg oil, mining and finance. There are no major UK multinational internet companies, consumer electronics companies, manufacturing companies (eg vehicles). You need to go outside the UK to get a full exposure to the worlds industries.

dunstonh

Could you explain a little more how it wouldn't be balanced, and what level of risk it is?

It would depend on your investment strategy but the woodford funds are not multi-asset or sector diversified. They are designed to be held in a wider portfolio of single sector funds. Not by themselves.

The lack of diversification and 100% equity pushes it to the high risk end of the scale. Way above the tolerance and capacity for loss of the average UK investor.

Probably should have mentioned, the teacher's pension is small, just under two years' worth of contributions so I don't actually qualify being a month short. Value is just under £4,000.

Is the pension in the unfunded teachers pension scheme or an independent pension scheme or local authority pension?

Sobryma

I have a couple of Tilney Bestinvest SIPP's - self & advised. You have the answer already but you probably haven't realised that.
Bestinvest operate a series of fairly conservative asset allocation models you need to chose your risk level and blend funds, ETF's and IT to your chosen model. I would use maybe 15 funds or so to get a decent mix - I use their recommended funds and my own choices.

http://www.bestinvest.co.uk/investment-research/asset-allocation

Once you start buying funds - go to the tab "Investment report" this shows you Risk Level / Asset Allocation / Investment Rating. Its a really neat tool you don't need to follow too strongly but is a great guide.

You can select funds and run a model before you buy the funds by running their Bestinvest First report.

Alternatively keep it simple and choose one of their Ready Made Portfolio's (no platform fee in a SIPP but they charge a management fee on the fund) or clone it by choosing the top ten funds.

Big_Dogg

Thanks everyone for your replies.

I will reply properly when I have more time. It's a big subject that's been on my mind a lot recently, not something I can just rattle off a response to, hope you'll understand.

I'd like to come back and question some of the comments made; not to be rude, but hopefully so I can add some depth to my understanding. If I come across as challenging at all, don't take it personally - I just want to learn.

Thanks again.

David

AnotherJoe

Another thing you can do is go to the Nutmeg site plug in your risk level and look at the funds they allocate and then buy those in your SIPP.

LHW99

But in respect of transferring even a small teachers' pension - don't forget to consider that there will be a provision for a spouse's pension after your death