Excessive or reasonable charges for managed SIPP?

[Deleted User]

And a 10-fund portfolio is complete nonsense. Advisors love complexity to try and justify their high fees.

[Deleted User]

Buffett is a little different from almost everyone. He can interview CEOs before investing. He can drive decision-making. He can buy companies which don’t sell shares. He can spend his whole life on selecting and managing investments. He, has unique psychological make-up. He knows what he is talking about. He certainly does not let IFAs rip him off by managing his money

Prism

Deleted_User wrote: »

Annual charges of 1% are too high. 2% charges are detrimental to one’s long term prosperity. There is no person on earth who is suited investments with 2% charges (except the advisors and the expensive fund managers). Your competence is questionable. And that is the kind explanation.

Hmm, I am averaging about 1.2% (platform and funds) charges doing it DIY. Another 0.5% if I chose to pay an IFA to do it for me doesn't seem unreasonable. The only thing I could do to lower the charges without likely lowering the performance would be to swap platforms which could save me about 0.15%

There are some decent funds with 1.25% charges which including an advisor and platorm fee could get to more than 2%.

Malthusian

Deleted_User wrote: »

As Warren Buffett says, “The bottom line: When trillions of dollars are managed by Wall Streeters charging high fees, it will usually be the managers who reap outsized profits, not the clients.”

If your aim is outsized profits then an IFA is not for you. You would probably be more suited to the likes of Elite Investor Club and their dodgy investments offering guaranteed 10% per year. They don't charge any fees don'tchaknow.

[Deleted User]

Malthusian wrote: »

If your aim is outsized profits then an IFA is not for you. You would probably be more suited to the likes of Elite Investor Club and their dodgy investments offering guaranteed 10% per year. They don't charge any fees don'tchaknow.

My aim is market returns. And I am getting them. Doing better than doubling in 10 years.

You seem to be confused. “Outsized returns” (aka alpha) is exactly what active funds try to deliver. I invest in passive funds. IFA invested in a bunch of bad expensive active funds for the OP. You got it 180 degrees wrong.

[Deleted User]

Prism wrote: »

Hmm, I am averaging about 1.2% (platform and funds) charges doing it DIY. Another 0.5% if I chose to pay an IFA to do it for me doesn't seem unreasonable. The only thing I could do to lower the charges without likely lowering the performance would be to swap platforms which could save me about 0.15%

There are some decent funds with 1.25% charges which including an advisor and platorm fee could get to more than 2%.

My costs are around 10 bp, all in. I use ETFs. My platform is free (I am in Canada) but I don’t believe there are no index funds/ETFs and platforms in the UK with total costs far below 1%.

zagfles

Deleted_User wrote: »

My costs are around 10 bp, all in. I use ETFs. My platform is free (I am in Canada) but I don’t believe there are no index funds/ETFs and platforms in the UK with total costs far below 1%.

Yes it's quite possible to get total costs of the same sort of level ie 0.1-0.2% using ETFs especially with a big fund. Most platforms cap charges for shares/ETFs. Even HL.
One of our clever regulars Snowman has a spreadsheet which works out platform charges for various platforms:

https://forums.moneysavingexpert.com/discussion/5583030/coolly-comparing-investment-platform-charges-snowmans-spreadsheet

[Deleted User]

zagfles wrote: »

Yes it's quite possible to get total costs of the same sort of level ie 0.1-0.2% using ETFs especially with a big fund. Most platforms cap charges for shares/ETFs. Even HL.
One of our clever regulars Snowman has a spreadsheet which works out platform charges for various platforms:

https://forums.moneysavingexpert.com/discussion/5583030/coolly-comparing-investment-platform-charges-snowmans-spreadsheet

Thanks. Yes, I already found a similar link. http://www.comparefundplatforms.com/compare.aspx I have around 100k stuck in the UK. Will be transferring them to AJ Bell. They seem to be most cost efficient for a small fund with ETFs.

Prism

Deleted_User wrote: »

My costs are around 10 bp, all in. I use ETFs. My platform is free (I am in Canada) but I don’t believe there are no index funds/ETFs and platforms in the UK with total costs far below 1%.

Yes you can get charges very low. Its cheap to hold ETFs on many platforms. The point is that I am choosing not to hold cheap ETFs. My choice is to hold other funds that happen to cost more than 1% including platfrom. Thats not always a bad thing nor does it mean that I am going to underpeform because of those fees. In the same way, if an IFA can add 0.5% of value (amongst the other stuff they do) then thats not a bad thing either.

[Deleted User]

Prism wrote: »

Yes you can get charges very low. Its cheap to hold ETFs on many platforms. The point is that I am choosing not to hold cheap ETFs. My choice is to hold other funds that happen to cost more than 1% including platfrom. Thats not always a bad thing nor does it mean that I am going to underpeform because of those fees. In the same way, if an IFA can add 0.5% of value (amongst the other stuff they do) then thats not a bad thing either.

I’d like to see how many IFAs buying a bunch of expensive funds and putting together portfolios outperform boring benchmark indices. Will be very, very few over 5 years, a fraction of that over 10 years and none over 20 years. Plenty of analysis and data showing this for active funds; active funds with another fee on top is going to make it even worse.