Complicated SIPP Transfer Question

dunstonh

Does the Aviva wrap do drawdown?

Yes.

Aviva are moving their platform software to FNZ this year. Generally platforms powered by FNZ are the better ones in term of functionality. Aviva's at the moment is a rather poor.

ffacoffipawb

dunstonh wrote: »

Yes.

Aviva are moving their platform software to FNZ this year. Generally platforms powered by FNZ are the better ones in term of functionality. Aviva's at the moment is a rather poor.

Actually I have Aviva Pension - presumably the same FSCS and drawdown facility applies. Direct investment into Aviva funds and Fundsmith. No advice. Access via Aviva website or My Aviva app.

Currently £50 per month gross into each of the following ...

Vanguard Lifestrategy 100% Equity Accumulation
Vanguard FTSE U.K. All Share Index Unit Trust Accumulation
Fundsmith Equity Class I Accumulation
Aviva Investors Multi-asset Fund V
Lindsell Train UK Equity Accumulation

Aiming for £10k before taking small pot

_pete_

dunstonh wrote: »

Use a personal pension instead then. SIPPs get £50k FSCS protection. Personal pensions get 100% FSCS protection regardless of their value. Or use a SIPP that allows investment on multiple fund houses and ensure you place no more than £50k in any one fund house.

The risks you describe are very low but if they do worry you then you have ways to mitigate them.

Thank you very much indeed - those are all points I was unaware of.

I've just had a look at a few personal pensions, but it seems like the charges are all percentage based, and therefore quite expensive as my pot is pretty substantial.

I think I might struggle to find the number of global trackers required for each to duck under the £50k limit, but it should be easy enough to spread my pot between the global trackers offered by Vanguard, Blackrock, L&G and HSBC to get at least some protection. Are there other global trackers I should be considering? I'd like to maintain my 60/40 equity/bond split.

Can I just clarify: when you say....

dunstonh wrote: »

You do need to remember that a company does not have the money you invest for its own purposes. It doesnt get to spend the money. So,a company could fail and not have any impact on the investments other than short term issues over the administration. and its likely an administrator would keep it running as a going concern as any buyer would not want disruption.

...do you mean if the platform (eg IWeb) goes bust, all my funds are protected? I'm assuming it's this rather than the fund company itself (eg, Blackrock. HSBC etc etc)?

Thank you again

bigadaj

The protections are multi level, which is why the need for teh fscs protection is so unlikely.

So if iWeb, for example failed, then teh funds would simply move to another platform.

If black rock, vanguard etc failed, then teh funds, or at least the shares, bonds etc contained in them would similarly be preserved and taken over by another fund manager.

_pete_

bigadaj wrote: »

The protections are multi level, which is why the need for teh fscs protection is so unlikely.

So if iWeb, for example failed, then teh funds would simply move to another platform.

If black rock, vanguard etc failed, then teh funds, or at least the shares, bonds etc contained in them would similarly be preserved and taken over by another fund manager.

Thank you! That's very reassuring. So, basically any index tracker is as near as safe as you can get (in terms of catastrophic events like fund managers and sipp providers going bust)?

dunstonh

_pete_ wrote: »

Thank you! That's very reassuring. So, basically any index tracker is as near as safe as you can get (in terms of catastrophic events like fund managers and sipp providers going bust)?

Trackers have no increased level of "safeness" over any other type of pension fund ot unit trust/OEIC. Indeed, a tracker in ETF form has less protection as they do not qualify for FSCS protection.

It is not the investment style that matters. It is the investment type.

_pete_

dunstonh wrote: »

Trackers have no increased level of "safeness" over any other type of pension fund ot unit trust/OEIC. Indeed, a tracker in ETF form has less protection as they do not qualify for FSCS protection.

It is not the investment style that matters. It is the investment type.

Thank you again.

I guess I'm confused. My understanding, as this thread has developed, was that I wouldn't need any kind of 'protection' as there was virtually no way that I could lose an investment in a fund (beyond the normal risk of stockmarket investment). Eg, if I held Vanguard LS60 in IWeb then my investment would be safe even if IWeb or Vanguard went bust and I wouldn't need any protection from the FSCS. I would not be using ETFs, by the way. What am I missing here?

dunstonh

I guess I'm confused. My understanding, as this thread has developed, was that I wouldn't need any kind of 'protection' as there was virtually no way that I could lose an investment in a fund (beyond the normal risk of stockmarket investment).

There have been several unit trust/OEIC failures in recent years and a number of IT failures in the past. All of them were non-mainstream.

What am I missing here?

It was your reference to "tracker" being safer. Being a tracker does not make it safer. BTW, VLS60 is not a tracker. It is a fettered fund of funds. Sometimes referred to as active passive. i.e. an active management strategy using passive underlying investments.

Risk is not on/off. It is a sliding scale. Everything we do in life has risks. Perception of risks can sometimes lead to a risk being underestimated or over stated. For example, endowments had generations of paying out big surpluses. The risks became downplayed and under estimated as they had never failed. Then a serious of economic changes that could not have been predicted took place and endowments started to fail.

Prior to the credit crunch, SCARPS were being sold by the banks left right and centre as a "mainstream" investment product. Many of these were backed by Lehmans. These went on to fail in the credit crunch. Everyone thought the FSCS would step in but even they did not know whether they were covered under the FSCS or not. After a large amount of investigation, they decided they were not. Almost overnight, the sale of these SCARPs was much reduced and they ceased to be mainstream.

So, it is always worth keeping all risks in mind. I personally would not be too concerned about FSCS protection on a very mainstream unit linked fund. However, I do often introduce a different fund house where I get to £50k with one just to be on the safe side with cautious investors. Not because I think one will fail. Its more a case of not taking any chance where I do not need to. There are plenty of alternatives to VLS60, if that was your choice. So, 50k in that and 50k in another and so on, is not a problem.

_pete_

Thank you once again. I appreciate your patience! :beer:

It sounds as though I might be best to spread my pot among VLS60 and its various alternatives as far as possible.

On another thread we identified the following ranges as VLS alternatives:

- HSBC Global Strategy
- L&G Multi-Index
- BlackRock Consensus

Are there any others that are worth considering?

dunstonh

Are there any others that are worth considering?

Dont rule out managed options as well. There are many viable managed multi-asset funds with very strong records. Having mix and match active/passive and managed is not a bad thing.