CLose Borthers SIPP

Lissart

Afternoon.
Just started looking into some investing. Could anyone share their experiences of the Close Brothers SIPP please? 2% is being charged to me. Are they considered sound/good bet/expensive/cheap or what? I'm looking at their Managed Conservative, Conservative Portfolio and Tactical Select Passive Conservative funds that I've been told match my risk tolerance. I'd appreciate any information. Doubtless from this post it is obvious that I'm very new to this game!
Thanks

Albermarle

When looking at SIPPS ( or any pension or S&S ISA) you have to separate out the platform ( this is the front end part ) and the actual investments your money is in .
The Close Brothers platform is similar to may other platforms - not the cheapest but not the most expensive either . Standard charge is 0.25% of all the money you have invested in the platform .
On this platform you have a choice of thousands of investments, most with no link to Close Brothers.
However most platforms have also have a range of their own 'managed investment solutions ' which are promoted as an easy option for newbie investors . Inevitably these are expensive .
2% overall charge is very much at the top end . More typical would be a total charge of 0.5% to 1.25 % depending on what investments you hold.
So in summary nothing wrong with Close Brothers as a platform but you have been sold some rather expensive investments .to hold on the platform .
Probably a SIPP is not the best bet for an inexperienced investor and you might be better off with a personal or stakeholder pension .

SonOf

Its an unusual choice. Nothing wrong with that but they are a very small provider and not one that you would expect the average consumer to choose.

Also, you are using their own brand funds. So, that would add to the cost. Indeed, you are paying more than a typical IFA arranged portfolio despite you not having to pay an IFA. Usually, people pick their own to save money (i.e. not pay the IFA charge). Not pay more.

Lissart

Thanks. I picked Close Bros based on a "Witch" report I found somewhere on the internet which compared charges. Close was the cheapest. So I phoned them up and have had a number of exchanges with their FA (restricted obviously.) I have become more and more suspicious that the "recommendations" are far from in MY best interests because they are a lot more expensive than I should be paying. The essential problem I am trying to solve is that my current PPP does not allow drawdown - which is clearly the option I want. (Age 57.) So I need to transfer it somewhere suitable in order to eventually access it, without a massive tax bill. I don't need to access the pot in the immediate future. I want something simple, cheap and easy to both understand and manage. Any further thoughts.....?


PS: I should just add that because the FA has written a report - the consequences of which I did not fully understand - he has added in his fees. It was also mentioned in the blurb that there are no initial start up costs. This is playing with semantics as there IS a further 0.3% fees to open it. Then he has slapped on a further 2% for "ongoing advice" which he states he is "confident represents value for money." I profoundly disagree having studied the figures for what is a very simple situation. This experience has done nothing to enhance my opinion of FA's......

SonOf

Close was the cheapest.

But their costs, including the funds, is almost double what many IFAs would come out at.

I have become more and more suspicious that the "recommendations" are far from in MY best interests because they are a lot more expensive than I should be paying.

They are restricted FAs. The advice will be suitable but the costs will not be the best and the options restricted to own-brand.

This experience has done nothing to enhance my opinion of FA's......

Which is why you should see an IFA and not an FA if you are after advice.

Lissart

Ta. I have had initial conversations with several IFA's and did not follow up because I was not convinced. They also quoted a "headline" figure for their advice of 2%, as did the Close fellow. But as I pointed out, it was not 2% but 2.3%! Thanks to these forums, I have only recently become aware of the possibility of a one-off fee (in the region of £800 was mentioned) to sort out a transfer of my PPP. Obviously I was aware of the FA's restricted status but he carefully worked round this to imply it was not a problem. As a "layman" - and certainly a rookie in all this - I find the term "suitable" somewhat "unsuitable." By the guy's own figures, because of these whopping charges my pot would be worth quite a bit less than leaving it where it is! Who is ever going to opt for that - report or not??

Albermarle

It's worth noting that you can just register direct with Close Brothers ( or similar alternative ) for a new SIPP , on the internet for zero cost and all relatively easy. As said before there is a platform charge of 0.25% + the charge for the funds you invest in ( can be as low as 0.22%) .
Transferring your PPP will cost zero .
So called DIY investing.

Alternatively you can employ an IFA to give you professional advice , especially on what finds to invest in . Typically they charge an ongoing cost around 0.75% per year .

Have you already agreed to pay the FA from Close Brothers ? or does it depend on whether you follow through with their recommendations or not ?

AnotherJoe

Lissart wrote: »

This experience has done nothing to enhance my opinion of FA's......

It should also not enhance your opinion of Which either.

PurpleJellyFish

My SIPP is with Close Brothers. I transferred an old employers pension - no benefits to keeping it where it was. I'm now adding a small amount monthly in addition to my employer's DB pension.

I can't complain about Close Brothers. Everything has been quick and efficient. I chose to DIY - they don't have as many funds on offer as some of the big suppliers (HL, AJ Bell etc.) but more than adequate for my tracker needs. Don't know about the packaged funds but as a provider they're certainly not the worst choice.

Lissart

Albermarle.
The fees have been quoted as a % of the sum invested. Therefore I take it that if I decide not to proceed with Close, £0 invested = £0 fees to be charged for the report or anything else. that the FA has provided. As he is a salaried employee I assume that someone not investing is part of the job. I have not signed anything or agreed to pay any specific sum for any work he has completed so far.

DrSyn

Lissart Your OP suggests you are new to investing.

Would this help you in finding a suitable platform?

http://www.comparefundplatforms.com/compare.aspx
https://monevator.com/compare-uk-cheapest-online-brokers/

You might find both of these interesting to watch:-

http://www.kroijer.com/
https://www.ifa.com/indexfundsthemovie/