Vanguard SIPP Announced

Johnnyboy11

Any thoughts whether it is best to transfer existing Vanguard products held on the HL platform 'in specie' or sell first then transfer to the new Vanguard SIPP when avaialble? I was thinking that this week might be a good time to sell owing to high stock market valuations and favourable GBP:USD exchange rate, then sit in cash until the Vanguard SIPP transfer is available. The saving will be about £46 per month, so worth doing.


I was also thinking of sending a message to HL advising of my plans, and giving them the opportunity to reduce their 0.45% platform fee. If you don't ask...

Albermarle

I was thinking that this week might be a good time to sell owing to high stock market valuations and favourable GBP:USD exchange rate, then sit in cash until the Vanguard SIPP transfer is available.

You are trying to time the market , which usually does not work .
Also what if the market does dip but the Vanguard SIPP is still not available to try and buy in at a lower price.?

soulsaver

Johnnyboy11 wrote: »

Any thoughts whether it is best to transfer existing Vanguard products held on the HL platform 'in specie' or sell first then transfer to the new Vanguard SIPP when avaialble? I was thinking that this week might be a good time to sell owing to high stock market valuations and favourable GBP:USD exchange rate, then sit in cash until the Vanguard SIPP transfer is available. The saving will be about £46 per month, so worth doing.


I was also thinking of sending a message to HL advising of my plans, and giving them the opportunity to reduce their 0.45% platform fee. If you don't ask...

Good luck with it - they didn't consider £125k substantial enough to negotiate on a few years ago. But as you say IYDA..and policies change.

bowlhead99

Johnnyboy11 wrote: »

Any thoughts whether it is best to transfer existing Vanguard products held on the HL platform 'in specie' or sell first then transfer to the new Vanguard SIPP when avaialble?

In specie would be the way to go because generally markets go up over time and it makes no sense for an administrative change (such as change in pension wrapper provider) to be a catalyst for you to temporarily stop investing when you don't need to do that.

- if the markets go up a few percent over the couple of weeks that you are out of them, you will be really annoyed that you have damaged the the prospects for your pension pot by tactically jumping out of investments when you didn't need to, only to buy back in at a higher level.

- whereas, if the markets fall over the period of the in specie transfer completing, while you stay in those markets, you should be unconcerned and not unduly annoyed; because markets always go down occasionally, and your game plan for your pension pot being accumulated over decades has surely never been to jump out of investments and into cash to try to guess when the down months are going to happen, because logically you can't predict such events with enough accuracy.

I was thinking that this week might be a good time to sell owing to high stock market valuations and favourable GBP:USD exchange rate, then sit in cash until the Vanguard SIPP transfer is available. The saving will be about £46 per month, so worth doing.

i) If it is 'worth doing' the transfer to save £46 a month, which comes from the platform fee dropping by 0.3% (0.45%-0.15%), you could surely already grab a saving of about two thirds of that (£30 a month) right now, by moving to a platform where the platform fee drops by 0.2% (0.45%-0.25%). Somewhere like AJBell's Youinvest. Or you could use a cheap fixed-fee provider like Halifax's IWeb (£180 per year plus transaction fees).

ii) The logic of jumping out of investments now and sitting idly in cash while you wait for a new cheap provider to launch their services in a timeframe that they still haven't specified does not make sense unless you know something we don't about the future direction of markets. Even if recent markets have been upwards, reducing the short term future potential upswings that might have been possible if recent markets hadn't already been so 'upwards' ... investing still has a long term positive expectation, and the market only needs to deliver nominal returns of half a percent per year to cover platform and product costs.

iii) 'favourable GBPUSD' exchange rate is pretty meaningless, it can only be considered 'favourable' in the context of what it is going to be in a few months time or in the long term, neither of which you know with any certainty.

For example sterling at 1.31 is weaker now than it was in mid December (1.35 range), and it is weaker than it was in late Jan to mid April of 2018 (1.40 range) but it is not really any weaker now than it was in mid Jan to early May 2019 (1.30 range) or the third week of October to early December 2019 (1.30 range), while it is stronger than late May to early October 2019 (1.20-1.27 range).

So depending on exactly what cherry-picked timescale you're looking at, you might think it is relatively strong or relatively weak compared to your 'recent' memory of rates - but as you don't know where it is going next or when, it doesn't make a lot of sense to say that you will temporarily stop holding international investments as part of your retirement planning, and buy back in later when some other service provider launches a cheap pension product. Especially when other providers already have cheap pensions in the market right now, it makes little sense to use Vanguard's pension launch date as a catalyst to suddenly dive back in to investment from cash.

I was also thinking of sending a message to HL advising of my plans, and giving them the opportunity to reduce their 0.45% platform fee. If you don't ask...

No doubt they will be uninterested at <£200k, because they make half a billion a year in revenue, and the revenue they make from you is only a millionth of that. If they sweeten your rate to shave a few hundred off your fees and you tell other people that all you need to do to save half your fee at HL is to ask for it, the power of 'word of mouth' means that soon everyone else will ask for it.

Hence giving up fee income to retain a mercenary customer who may still move eventually, could cost them a lot more in the grand scheme of things than what they gave away to you personally. It's far easier for them to have a policy of 'we don't negotiate with terrorists or blackmailers' and then reconsider that policy if you actually have a serious amount of money with them (several hundreds of thousands more than you actually have).

Johnnyboy11

Thanks Bowlhead99, that's a great post and I wouldn't argue with any of your well made points. I've written an in-message to HL, so we'll see how they respond. If I do transfer, and I plan to, then it will probably be 'in specie' and only the Vangiuard funds. I will leave the LT and FS funds with HL, assuming a part transfer is possible. I quite like the idea of having my savings spread across several providers.

Albermarle

I will leave the LT and FS funds with HL,

As Bowlhead said, there are cheaper providers than HL available today , that you could hold these funds with .

ScoobyZ

Still not launched.

Found an interview while looking around:

https://www.youtube.com/watch?v=AIA1NxqDKGE

ScoobyZ

Now available!
https://www.vanguardinvestor.co.uk/what-we-offer/personal-pension/personal-pension-account?cmpgn=ET0220UKCESIP0002

swindiff

Had a quick search, am I right in assuming that there is no Android App for Vanguard platform like there is for HL?

Fly100

Considering moving a pension here, apart from the Covid 19 issue, how are people finding it ? are you happy with with the service you are receiving ? I suspect its far to early to discuss performance.