Thoughts on Standard Life

IanSt

dunstonh wrote: »

In that scenario, you would expect something like a PPP using insured funds at 0.4% or thereabouts.

dunstonh, if I may ask on behalf of a friend of mine, would that only be available via an IFA? He is risk averse, so although I've told him that the chances of any investments needing fscs protection is extremely low he is wary of investing into platforms and funds that could be limited to £50000 protection.

dunstonh

dunstonh, if I may ask on behalf of a friend of mine, would that only be available via an IFA?

The DIY market has mostly gone down the SIPP route. SIPPs have lower regulatory requirements (so lower cost for firms to operate). The DIY market is very cost focused. So, it was a no brainer for those firms.

PPPs are mostly available via IFAs and FAs.

Malthusian

dunstonh wrote: »

The DIY market has mostly gone down the SIPP route. SIPPs have lower regulatory requirements (so lower cost for firms to operate). The DIY market is very cost focused. So, it was a no brainer for those firms.

I'm not sure the DIY market is that cost focused, given Hargreaves Lansdown is the biggest DIY platform in the country. And that many DIY investors pay more in costs than IFA clients even taking into account the IFA's advice charge. (I should clarify that I don't mean the DIY investors here on MSE, but DIY investors in general, who tend to end up with multi-manager or other active funds heavily promoted by the platform, often with a total cost of 1.25 - 1.5%.)

I think it actually works like this: DIY investors are split into two categories. Either they don't care about SIPP v PP in which case the lower cost is free money for the provider. Or they associate SIPPs with freedom and flexibility, in which case it is an attraction to customers. DIY customers who know about and care about the difference in FSCS treatment are very rare.

IanSt

Dunstonh, many thanks for your kind reply.

dunstonh wrote: »

PPPs are mostly available via IFAs and FAs.

Given his reluctance to trust the £50,000 protection afforded to sipps I've previously suggested that he visit one - he's unwilling to do so, but it looks like I should try again.

Lily1

The original IFA's charges were 3% plus vat for the original investment, this was after £10k for the transfer. Ongoing fees were in the region of £7k per annum. He also wanted us to pay an annual amount to consult with him. We have found another one who will do the transfer for £4K, we would ideally prefer charges in the region of .50 to 1% annually. Hopefully when we meet the new IFA he will be able to show us more options.

dunstonh

The original IFA's charges were 3% plus vat for the original investment,

Was this an IFA? There is no VAT on advice that where a product is being bought.

Ongoing fees were in the region of £7k per annum.

Was that the bottom line or just the adviser cut?

He also wanted us to pay an annual amount to consult with him

If that was not included in the above, then it is worth noting that the £7kper annum is about the same as you would pay with Std Life.

we would ideally prefer charges in the region of .50 to 1% annually.

Platform charge, fund charge and adviser charge or just fund charge and platform charge?

If the adviser puts you on a very basic option, that is achievable. You may be compromising your investment returns by far more than the charges. What is your priority - paying less or earning more?

Lily1

The fee was for using his investments. Not sure what platform charges mean,.feels like there is so much choice it's hard to know what to do. This all has to be sorted by 21December or the pension will go into the P P F. We are risk averse so if we could achieve a rate similar to inflation we would be happy.

dunstonh

The fee was for using his investments.

IFAs do not have their own investments. FAs do. Are you sure it was an IFA and not an FA?

Check their status and on Monday, start firing questions at them.

Lily1

Thanks, think we have decided not to use him. He is described as a wealth manager. Obviously there is no point googling independent financial advisors!