Excessive or reasonable charges for managed SIPP?

[Deleted User]

Prism wrote: »

What seems to happen is that DIY investors watch what is going on and then try and time the market by selling at the wrong time and buying again to late. They pick high % equity funds and then panic and sell after a correction. They pick high % bond funds missing years of growth. Last year there were lots of threads in march and december from DIY investors asking if they should sell everything and wait for the crash.

I imagine many people who use an IFA spend much less time looking at things and possibly purely putting their trust in someone else, even if that someone else underperforms a little, do ok by doing nothing different during those corrections and crashes.

A typical post from last year looks a bit like this..
OP: "just check my yearly review from IFA and I am down 5%!"
Helpful forum members: "That terrible, passive multi allocation fund equivalent is only down 4%"
What is missing is a nuch of the DIY other investors who are on -10%, but don't get involved
in the discussion

1. I am a passive investor. Don’t use IFA. I am not “DIY”. Use a standard method.

2. As per my IPS, I do not attempt to time the market. Ever.

3. Last year I stayed fully invested, as per usual.

4. I did lose 4% in 2018. Not particularly surprised as this followed 15% gain in 2017. Mean reversion is a big thing in stocks.

The claim that IFAs don’t time the market is wrong. All investors who do that are making a mistake.

I am not suggesting that people should just buy an index fund. I am suggesting they should read up and educate themselves before they pull the trigger.

zagfles

Prism wrote: »

What seems to happen is that DIY investors watch what is going on and then try and time the market by selling at the wrong time and buying again to late. They pick high % equity funds and then panic and sell after a correction. They pick high % bond funds missing years of growth. Last year there were lots of threads in march and december from DIY investors asking if they should sell everything and wait for the crash.

I imagine many people who use an IFA spend much less time looking at things and possibly purely putting their trust in someone else, even if that someone else underperforms a little, do ok by doing nothing different during those corrections and crashes.

A typical post from last year looks a bit like this..
OP: "just check my yearly review from IFA and I am down 5%!"
Helpful forum members: "That terrible, passive multi allocation fund equivalent is only down 4%"
What is missing is a nuch of the DIY other investors who are on -10%, but don't get involved
in the discussion

And obviously you know these exist despite them "not getting involved in the discussion" :rotfl:But they must be there, obviously you have some way of knowing they're just lurking without contributing.
Or is this more speculation based around irrelavent US studies? Investing "DIY" is part of US culture, far more people do it there than here. Here it's not that common, most people rely on workplace pensions or use personal pensions with defaults rather than dabbling choosing investments themselves. As a result only those who are really interested will "DIY", therefore are likely to have better knowledge.

Obviously there are those like the poster here who wanted to invest his entire pension in bitcoin :rotfl:but in general people in the UK don't understand equity investment, know they don't, so avoid it and do stuff like eg buy a buy to let property. That's probably a far more common investment mistake than choosing funds with the wrong risk level.

Thrugelmir

zagfles wrote: »

And obviously you know these exist despite them "not getting involved in the discussion" :rotfl:But they must be there, obviously you have some way of knowing they're just lurking without contributing.
Or is this more speculation based around irrelavent US studies? Investing "DIY" is part of US culture, far more people do it there than here. Here it's not that common, most people rely on workplace pensions or use personal pensions with defaults rather than dabbling choosing investments themselves. As a result only those who are really interested will "DIY", therefore are likely to have better knowledge.

Obviously there are those like the poster here who wanted to invest his entire pension in bitcoin :rotfl:but in general people in the UK don't understand equity investment, know they don't, so avoid it and do stuff like eg buy a buy to let property. That's probably a far more common investment mistake than choosing funds with the wrong risk level.

Year to 31st March 2018 amounted to £14.3 bn and involved 72,700 individual transfers.

zagfles

Thrugelmir wrote: »

Year to 31st March 2018 amounted to £14.3 bn and involved 72,700 individual transfers.

What did? Those are meaningless numbers without context/URL

Prism

Deleted_User wrote: »

1. I am a passive investor. Don’t use IFA. I am not “DIY”. Use a standard method.

2. As per my IPS, I do not attempt to time the market. Ever.

3. Last year I stayed fully invested, as per usual.

4. I did lose 4% in 2018. Not particularly surprised as this followed 15% gain in 2017. Mean reversion is a big thing in stocks.

What you do or what I do is irrelevant to this discussion. We both do absolutely fine by the sound of it using somewhat different strategies. This is about all those others who do not do that..

I am not suggesting that people should just buy an index fund. I am suggesting they should read up and educate themselves before they pull the trigger.

So what about all those people who do not understand investing and do not want to (or cannot) learn for various reasons. Just because you find it easy to understand investing and most importantly understand yourself, don't assume others do. I don't know about you but I can honestly say that nearly everybody I know is clueless about this stuff and don't really care to learn more. The problems tend to come when someone comes into money - an inheritance, or pension transfer maybe. They really do need advice at that point if only to prevent huge initial mistakes

Thrugelmir

zagfles wrote: »

What did? Those are meaningless numbers without context/URL

Transfers made out of Defined Benefit Schemes.

zagfles

Prism wrote: »

What you do or what I do is irrelevant to this discussion. We both do absolutely fine by the sound of it using somewhat different strategies. This is about all those others who do not do that..

So what about all those people who do not understand investing and do not want to (or cannot) learn for various reasons. Just because you find it easy to understand investing and most importantly understand yourself, don't assume others do. I don't know about you but I can honestly say that nearly everybody I know is clueless about this stuff and don't really care to learn more. The problems tend to come when someone comes into money - an inheritance, or pension transfer maybe. They really do need advice at that point if only to prevent huge initial mistakes

Or not. See the top post on the pension board now https://forums.moneysavingexpert.com/discussion/5992702/persuaded-to-transfer-out-of-uss-20-years-ago Would this OP have been better off with or without the advice he received do you think?

Things are obviously different now, but like with all things, close one area of rip-off, misselling, vested interests etc and another opens up. Pensions, endowments, PPI, now I think DB transfers. I know people who've had very suspect final salary transfers carried out by IFAs, people in good health with dependants and no particular reason to switch. I reckon this will be the next misselling scandal.

zagfles

Thrugelmir wrote: »

Transfers made out of Defined Benefit Schemes.

Just cross posted the exact same point! Transfers out of DB schemes need financial advice (except for very small pensions).

Prism

zagfles wrote: »

And obviously you know these exist despite them "not getting involved in the discussion" :rotfl:But they must be there, obviously you have some way of knowing they're just lurking without contributing.

Well I was down 10% at the same time. Do you think I was the only one?

Or is this more speculation based around irrelavent US studies? Investing "DIY" is part of US culture, far more people do it there than here. Here it's not that common, most people rely on workplace pensions or use personal pensions with defaults rather than dabbling choosing investments themselves. As a result only those who are really interested will "DIY", therefore are likely to have better knowledge.

It doesn't matter how common it is. For those that do it they would often be better with some advice. Look at all of the terrible choices in the HL top 10. I wouldn't reccommend any of those to an inexperienced investor. So we can either assume that all those people know exactly what they are doing - or they don't. Neither of us know but those US studies give us a hint that most people do not.

zagfles

Prism wrote: »

Well I was down 10% at the same time. Do you think I was the only one?

Ah so you're assuming other people made the same bad decisions as you? Some probably did. Others might be well up. We don't all boast about our performance any more than we all tell the world how badly we've done.

It doesn't matter how common it is. For those that do it they would often be better with some advice. Look at all of the terrible choices in the HL top 10. I wouldn't reccommend any of those to an inexperienced investor. So we can either assume that all those people know exactly what they are doing - or they don't. Neither of us know but those US studies give us a hint that most people do not.

So as someone whose performance was well below par you now claim to be able to judge that HL's top 10 are "terrible"?

What do you think about this poster's fund selection, he has an IFA: https://forums.moneysavingexpert.com/discussion/5992633/thoughts-ahead-of-first-annual-sipp-review