St James Place Pension Fund - Stay or Transfer to a SIPP

MPN

I invested £83,000 in a St James Place Pension Fund 4.5 years ago and pay £240.00 net (£300.00 gross) per month into the fund. Currently the fund value is £125,000 which I must admit seems OK to me?

About 3 months ago I changed some of my funds with SJP and I now invest 20% in each of the following SJP funds, North American, Greater European, UK Equity, Global Managed and International Equity. All these funds are top 1st quartile funds for SJP. Currently the worst fund performance out of these is the UK Equity Fund managed by Neil Woodford which has surprised me as the FTSE/UK Equity market is so high at the moment?

I recently retired and some friends have suggested I should transfer my pension from SJP into a SIPP with a platform such as Fidelity as it will be far cheaper for charges? I alreay have ISA's with Fidelity in funds such as Fundsmith, Jupiter European, CF Lindsell Train, Royal London Equity Income, Artemis Global Income and Newton Global Income.

I would really appreciate any advice or the pros and cons on whether I should consider transferring my SJP Pension Fund to a Fidelity SIPP? At the moment I am still in a penalty clause situation with SJP because I have not been in the pension fund for 6 years so have 18 months to go or a 1.5% penalty for the transfer.

Any help or advice or comments would be really appreciated because this is a difficult decision for me but since I've retired I now need to look after my finances better than before.

Thank you.

talexuser

You will find that the Woodford UK fund is unlikely to have underperformed because the other global funds have all just benefited from the large fall in sterling. This has been apparent in my UK funds compared to my global funds (being converted back into £).

All your ISA funds are good performers. If you are happy choosing yourself, then undoubtedly you can get a better deal that SJP.

I have a Fidelity SIPP, very happy with their service, but only because it is low value because I can only put in £3600 a year. The trouble with your value is they are a % based platform and you might well be better off with a fixed fee platform. It does become very complicated in fees if wanting drawdown or lump sums etc, but that may not bother you now.

dunstonh

I now invest 20% in each of the following SJP funds, North American, Greater European, UK Equity, Global Managed and International Equity.

Fixed percentages like that suggest no structure and just a random guess at allocation. Did you do this or did the SJP sales rep do it?

All these funds are top 1st quartile funds for SJP.

SJP only sell their own product. So, that is not a surprise that they are top quartile out of their own funds when they are one out of one. They are not top quartile when compared to the whole of market.

Currently the worst fund performance out of these is the UK Equity Fund managed by Neil Woodford which has surprised me as the FTSE/UK Equity market is so high at the moment?

The FTSE100 is different to UK equity sector average or UK equity income or any other UK strategy variant. Also, the UK has underperformed most western global stockmarkets this year. So, there should be no surprise there.

I recently retired and some friends have suggested I should transfer my pension from SJP into a SIPP with a platform such as Fidelity as it will be far cheaper for charges?

Every option is cheaper than SJP.

I would really appreciate any advice or the pros and cons on whether I should consider transferring my SJP Pension Fund to a Fidelity SIPP?

Do you know what you are doing and why? SJP is the most expensive option by a long way. There are options in between that an DIY. If you DIY, then you will save money on charges but you could lose money on returns if you are not sure what you doing (its like anything where you DIY. DIY well and its money saved. DIY badly and it can cost you a lot more).

MPN

Thanks talexuser

Any recommendations for fixed fee platforms for my £125,000 pot? I don't intend going into drawdown for a couple of years yet at least and then only need to drawdown money as and when needed.

MPN

Hi dunstonh

The percentages I did myself through research on the best SJP performing pension funds which my adviser then approved. I was already invested in Global Managed and UK Equity but chose to add North American, Greater European and International Equity mainly because they have performed consistently well in SJP funds over the past 5 years.

I don't really know what I am doing so any suggestions would be appreciated especially the type of options available to me between DIY and professional advice?

When I was working I was too busy to deal with my pension pot but now I would like to get it in some type of order. As I mentioned I have self invested in my Fidelity Isa's over the years and the funds I have chosen have done well but that might be luck!

Eco_Miser

MPN wrote: »

Any recommendations for fixed fee platforms for my £125,000 pot?

http://monevator.com/compare-uk-cheapest-online-brokers/

bowlhead99

MPN wrote: »

The percentages I did myself through research on the best SJP performing pension funds which my adviser then approved. I was already invested in Global Managed and UK Equity but chose to add North American, Greater European and International Equity mainly because they have performed consistently well in SJP funds over the past 5 years.

I don't really know what I am doing

The problem is that if you are paying decent fees, an adviser worth his salt should be giving you the advice, and you approving it. Rather than you giving him the advice when you don't know what you are doing, just based on what went up the most in the last five years ; and him approving it because it matched one potential idea of the high risk portfolio you claimed to want and you said you were happy with it anyway.

There is no point paying fat fees instead of peanuts but still getting monkeys. Especially if the monkey is you

The realisation to change the arrangement makes sense. Maybe after you first get the adviser, rather than you, to provide advice for the rest of the 18 month lock in. Their fees for that short period would perhaps be pretty cheap after you net off the exit fee otherwise payable. But if you stick it in a SIPP but don't know what you are doing (and for example, admit to not understanding why world and market events caused the relative returns that they did) then it sounds a bit doomed, and halfway house between advised and not advised (so you can tinker?) doesn't seem like it will end well. Maybe err on the side of more advice than less, from a new adviser, if you can afford that?

As I mentioned I have self invested in my Fidelity Isa's over the years and the funds I have chosen have done well but that might be luck!

Sounds like it might be. Markets do go up more than they do down so it is easy to get a result you think is ok without realising you could have got more, or got the same with lower volatility.

The best way forward depends whether you are really going to devote time to learning, understanding and planning investments if you are no longer working. Or whether you would prefer to set and forget by relinquishing control to a professional but using a cheaper adviser and cheaper funds than SJP. Trying to find a balance between paying an adviser and acquiring the adviser's knowledge yourself, could be trickier than both those black and white options I would guess.

talexuser

MPN wrote: »

Any recommendations for fixed fee platforms for my £125,000 pot?

Put your numbers in here
https://drive.google.com/file/d/0BxA6Przq6KI1VTVEU21qLUtoVG8/view?pref=2&pli=1

Thanks to Snowman.
Then check on site to see if any terms have changed recently.

dunstonh

The percentages I did myself through research on the best SJP performing pension funds which my adviser then approved.

You really shouldnt be with SJP. Your sales rep didnt really approve it. They just accepted it because you picking your own funds means they dont have to. So, you are now paying for something you are not getting. Plus, SJP reps dont have the software and analysis to portfolio build. Much the same as you dont.

I don't really know what I am doing so any suggestions would be appreciated especially the type of options available to me between DIY and professional advice?

The choice is really between using an IFA or going DIY. All other options have compromises or only do half the job. SJP is restricted advice and its damned expensive at that. Even more so when you are trying to DIY on a limited fund choice. IFAs have whole of market access. So, no limitations. The IFA will have the structure and do the fund selection. Not you. If you are going to do it then there is no point using anyone. DIY should also look for whole of market access. Not be limited by provider and certainly not use a provider that is geared for an intermediary. DIY allows you to do what you want. Even if its wrong. No-one else to blame. But you can do things that an adviser wouldnt do.

Knowledge is important when investing. Luck can be bad as well as good. So, getting lucky in one period does not mean you will get lucky all the time. I pick up on the knowledge side because you mentioned you were surprised the UK had underperformed. If you are going to self select both funds and allocations then you need to understand more about the markets and risks and issues than you currently do. DIY may save you 0.5% p.a. in charges but if it costs you 2% p.a. in returns, then its false economy. Nothing wrong with DIY. Just understand that it requires work if you are portfoio building. Another option low knowledge investors use is multi-asset funds. Don't be afraid to use these.

bigfreddiel

Some great answers dunstonh, surprising how people fall into this trap innit! fj

MPN

Thanks dunstonh for your good advice.

I was recommended a multi assett fund by a friend who invested in the Royal London Sustainable World Trust and he told me it has performed really well?