Sipp lump sum investment

Jim1904

He's still listed as independant on unbiased

dunstonh

Jim1904 wrote: »

He's still listed as independant on unbiased

In which case, you should report it to unbiased. You could also report it to his network/parent company as well so they can get it changed. Technically, it is a financial promotions breach.

Probably he used to be an IFA but at some point went restricted. A lot of network based advisers switched when networks dropped their IFA status. His entry on unbiased probably never got updated. Especially if he isn't paying them anything.

The adviser themselves must issue a terms of business to you which confirms their status. IFAs will point it out. FAs will gloss over it.

Jim1904

And the umbrella company hes affiliated to also claim to be independent financial advisors.

How can they advertise as independent yet only sell in-house products ? My distrust , is perhaps unjustified but maybe a little more honesty and transparency would help.

Audaxer

Jim1904 wrote: »

My faith in "independant " financial advisors is pretty non existent tbh. My pot is from a transfer of a defined benefit pension scheme . I'd never had to think about my pension, it was always something guaranteed and secure.... until it turned out it wasn't.

Interested to know why you transferred out of the Defined Benefit Scheme. I thought that would be more secure than transferring it into a SIPP?

So going forward I'll take my chances , pay for annual reviews but basically choose where I invest my money .

If you are going to choose your own investments why would you need to pay for annual reviews, as I thought the point of these reviews was for the adviser to review the portfolio and recommend any fund changes?

Jim1904

Main reasons for leaving were flexibility and employer solvency

An annual review will hopefully highlight areas that need re weighting . I don't mind paying for advice , i just wont pay excessive amounts for an algorithm juggle my money amongst the same passive funds.

OldMusicGuy

Jim1904 wrote: »

Main reasons for leaving were flexibility and employer solvency

An annual review will hopefully highlight areas that need re weighting . I don't mind paying for advice , i just wont pay excessive amounts for an algorithm juggle my money amongst the same passive funds.

I have to say, after years of educating myself about pensions, that's not a sensible approach IMO. You either become a DIY investor or you use an IFA. One-off advice will be expensive (I know, I had some) and although it may be of some use, the advisor won't really know you and be able to give in-depth advice. I paid for one-off advice and the advisor recommended a portfolio which was in line with my instructions. But I realised that I didn't know enough to really say what I wanted my investments to do.

Here's what I would suggest. First, make a long-term financial plan and identify how much money you will need in retirement, and when you will need it. Then look at any other income sources you will have (state pensions, partner pensions, savings, part time work, house downsizing, whatever). Work out the difference, and that's what you will need from your DC pension.

Then see where you are today with your pot and get a sense of how much growth you will need in your DC pot. If it's a lot, you will need to be more equity focused. If it's not a lot, you can be less equity focused. I have a large DC pot which (apart from SP) will be my only source of pension income. It has enough in it now to last our lifetime, provided I can match inflation. So I have gone very defensive, hold a high proportion of cash and have put the rest in three multi-asset passive funds which I will hold for at least 5 years, more likely 10. Two of these are from the funds you mention, and I used my risk profile to decide which funds to go for from these providers (understanding your appetite for risk is also important).

I don't need anyone to advise me on what to do. My returns will likely be lower than dunstonh's custom portfolio, but that doesn't bother me as I am not out to maximize returns, my goal is only to match inflation.

Dunstonh is a very knowledgeable and respected poster, but I do take exception to the way he states that your choice is to accept lower returns with your own DIY portfolio or pay his fees and get higher returns. I have said before that I would pay for that type of service if I paid excess fees to an IFA over what a passive portfolio would have done in the same period. If the IFA portfolio underperformed, then the IFA would be paid just the cost of running a passive portfolio. They will never do that though, which is why I prefer low cost, DIY investing.

FWIW my first advised portfolio included strategic bond funds and money market funds (because I said I was very risk averse). I was not impressed with how these performed relative to the cost, which is why I went all passive. My security blanket is cash, because that gives me short term protection against sequence of returns risk. This approach works for me, I am not saying it is right for you or anyone else. You need to do the planning first to help you decide how much growth you really need.

The worst thing you can do (I know, because I did this for a while) is to chase funds around based on relative and short-term performance. Pick a strategy and stick with it. If you don;t have the confidence to do that, that's when an IFA is helpful.

dunstonh

Dunstonh is a very knowledgeable and respected poster, but I do take exception to the way he states that your choice is to accept lower returns with your own DIY portfolio or pay his fees and get higher returns

I simplify it in these posts just to get an idea of the mindset of the person. i.e. are they cost focused or are they returns focused. It really does help to know the type of person you are dealing with and that question is a simple way of putting it.

This is not an adviser thing. Loads of DIY investors will use managed funds where they feel it is appropriate. Our strategy is to use passive as default unless there is a managed fund which we feel justifies sufficient growth potential to exceed the extra cost and provide a surplus. We have 12 funds in our portfolio and 5 are passive and 6 managed (two sectors don't have any passive funds available).

That is a common way for both advised investors and DIY investors to operate. Some will be biased only to trackers. Some are still biased only to managed. Being open-minded to both is what I personally feel is best.

I have said before that I would pay for that type of service if I paid excess fees to an IFA over what a passive portfolio would have done in the same period.

That option would not be compliant and would also be fraught with difficulty in trying to work it out. It would also create a bias that should not exist with an IFA.

OldMusicGuy

dunstonh wrote: »

I simplify it in these posts just to get an idea of the mindset of the person. i.e. are they cost focused or are they returns focused. It really does help to know the type of person you are dealing with and that question is a simple way of putting it.

Which I think is the OP's issue - whoever the adviser was they used in the first place made it sound simple and easy and underplayed the risk. Just because your portfolio performed well over the last 5 years does not mean it will do so well in the future. Your simple statement is implying it will always do better and that anyone that doesn't choose your portfolio clearly has a screw loose. So maybe just add the usual "but there's no guarantee we can maintain that level of differential in the future."

dunstonh wrote: »

That option would not be compliant and would also be fraught with difficulty in trying to work it out. It would also create a bias that should not exist with an IFA.

It's not fraught with difficulty because you are trumpeting the difference between your portfolio and similar investments based on figures you have worked out. Using those differentials as the basis for charging would not be that complex (I have dealt with far more complex contract-based charging mechanisms over the years). The fact that it's non-compliant suits you more than it suits the consumer IMO.....;)

dunstonh

It's not fraught with difficulty because you are trumpeting the difference between your portfolio and similar investments based on figures you have worked out.

it is difficult.

1 - no providers/platforms support that method
2 - it wouldnt be allowed from a regulatory perspective.
3 - over what periods do you monitor it
4 - what do you benchmark it against

OldMusicGuy

dunstonh wrote: »

it is difficult.

1 - no providers/platforms support that method
2 - it wouldnt be allowed from a regulatory perspective.
3 - over what periods do you monitor it
4 - what do you benchmark it against

1 - you could develop your own system to handle it (in terms of billing). It would not be that hard.
2 - Fair point, but that suits the IFAs.
3 - How about 5 years, like you did when you came up with these figures "I am just finishing off a portfolio review for someone whose return after charges is 52.12% but VLS60 (the equivalent for the risk profile) excluding adviser cost would be 38.92%."
4 - How about a similar find with an equivalent risk profile, like you did when you came up with those figures? Or can those figures not be trusted.....?

I don't want to take this thread further off track, but my point is you are very happy to quote figures that show how well your portfolio is doing but you (personally and the industry as a whole) will not stand behind them when it comes to charging for your fees. That's where a lot of the negativity around the whole advisory industry comes from.