Moving SIPP - Both Platform & from Discretionary Management

[Deleted User]

Hello

I would be interested in your thoughts please.

I am looking to move my SIPP which is managed by Discretionary Management company (AFH Wealth Management of Bromsgrove) to another platform and also away from DM arrangement.

I have been with them over 10 years and until 2 years ago I had a (seemingly) good FA and the management of my portfolio (SIPP & S/S ISA c£250k) seemed to be delivering a fair growth albeit against some pretty hefty management fees.

However after discovering some mismanagement issues (money sat in a GIA account rather than it being in my S/S ISA) & 2 years of poor performance (that does not match the general market) I have decided I am getting poor value for my fees from AFH.
THe SIPP platform is Suffolk Life.

I have other S/S Isas with:
£40k Fidelity (fees tbc) and £85k with NFu Mutual (1.25% annual mgmt)
which I am not so desperate to move unless I could do better.

Having had a chat with a seemingly very honest FA (who works for another Discretionary Management company) he made the comment:

"my advice would be to probably look at managing the funds yourself, there are plenty of online providers who offer investment portfolios based on your chosen to attitude to risk. Financial advice has changed over the last few years and investment performance is very much secondary now with what we do for clients. The annual fee we charge is mainly to cover advice with regard to tax planning strategies and advice on planning for the future, will they have enough money in retirement, how can they maximise the amount they leave to children etc etc.

If I were you I wouldn’t look for a firm based on investment performance as there will be very little to differentiate, despite what some may say it is impossible to predict markets and clients will lose money if markets go down and make money if markets go up. Even the worst performing funds will do ok if markets are going up and what is a top performing fund this year is likely to be a bottom performing fund next year so I wouldn’t worry too much about fund choice either. Better to have a diversified portfolio and you just remain in the markets for the long term."

I think this sounds like a good option, so please may I ask for recommendations for online providers who offer investment portfolios based on your chosen to attitude to risk. I am thinking that I would like to choose a few funds that I would not have todo alot of share dealing to begin with. ie until ie educated myself.


Thank you all

dunstonh

Having had a chat with a seemingly very honest FA (who works for another Discretionary Management company) he made the comment:

The general rule of thumb is to either use an IFA or DIY. Not use FAs and avoid anything with wealth management in the name.

OldMusicGuy

I would recommend that you educate yourself about investing options. Don't look for "ready made" portfolios because even if these are not fully advised, you still pay extra charges for them which are a waste of money. Instead, invest in a selection of well-diversified multi-asset funds (and consider other vehicles like ITs). Choose these yourself by understanding the makeup of the funds and by you working out how much you want to hold in equities/bonds/fixed interest/cash based on your own long term objectives and risk profile.

Two books that are usually recommended on this site ((I have found both very helpful) are "Investing Demystified" by Lars Kroijer and "DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing" by John Edwards. Also check out the Monevator site, https://monevator.com/.

If you don't want to do that, find a good IFA like dusntonh says and pay them to do it for you.

Audaxer

mulberryellie wrote: »

Having had a chat with a seemingly very honest FA (who works for another Discretionary Management company) he made the comment:

"my advice would be to probably look at managing the funds yourself, there are plenty of online providers who offer investment portfolios based on your chosen to attitude to risk. Financial advice has changed over the last few years and investment performance is very much secondary now with what we do for clients. The annual fee we charge is mainly to cover advice with regard to tax planning strategies and advice on planning for the future, will they have enough money in retirement, how can they maximise the amount they leave to children etc etc.

If I were you I wouldn’t look for a firm based on investment performance as there will be very little to differentiate, despite what some may say it is impossible to predict markets and clients will lose money if markets go down and make money if markets go up. Even the worst performing funds will do ok if markets are going up and what is a top performing fund this year is likely to be a bottom performing fund next year so I wouldn’t worry too much about fund choice either. Better to have a diversified portfolio and you just remain in the markets for the long term."

I think this sounds like a good option, so please may I ask for recommendations for online providers who offer investment portfolios based on your chosen to attitude to risk. I am thinking that I would like to choose a few funds that I would not have todo alot of share dealing to begin with. ie until ie educated myself.

That does sound like quite good honest advice from the FA you had a chat with. Unless you are confident about picking a portfolio of single sector funds, I would suggest looking at low cost, globally diversified multi asset funds. Some popular examples discussed a lot on this forum are Vanguard LifeStrategy funds, HSBC Global Strategy funds and L&G Multi Index funds. All come in various versions with different percentages of equities to bonds to suit your risk tolerance, and are available on nearly all mainstream DIY platforms. One multi asset fund is generally all that is needed to give you a well diversified portfolio, but if you are investing a large amount, then it maybe better to use 2 or 3 different multi asset funds to ensure you are covered by the Financial Services Compensation Scheme.

Albermarle

It seems like good advice , as investing in mainstream medium risk multi asset funds is not rocket science . Even if you do not fully optimise your portfolio , you still have the gain from not paying extra charges to a FA.
On the other side as you near retirement, it can get more complicated , depending on individual circumstances and advice can become more worthwhile .

dmelife

Sounds to me like the FA thinks you are likely to be a difficult client with unreasonable expectations. There aren’t many FAs that will turn down a £250k + investment.

By definition most advisers won’t beat the average, and some will underperform the average, and for sure it is more about planning and efficiency than absolute performance.

If you have noticed that the relative performance over the last 2 years has been poor, have you asked why?
How much is in the GIA? If you are not breaching any tax limits, they may have decided that the dealing charges to move to the ISA were not warranted.

Have they helped you in other areas, eg pensions, or it is purely investment management?