Advisors fees

PaulCooper

Hi Guys
To date all of my funds within my SIPP have been held within banks or Building Societies, I realise the folly of this & that I'm losing money in relation to inflation, although luck at the moment is on my side!. I'm looking to withdraw >£100k out of a building society & do something else with it----- I don't know what (obviously I'm very risk averse) Therefore I'm thinking of taking on the services of an IFA to help me. What sort of fees would I expect to be paying for this service (I want them to manage the £100k ish that will already be in a cash account within my SIPP)

Obviously if anyone out there has got any ideas what I could do with the funds I'd welcome these views----------- apart from the commentary that I'm wrong keeping it in banks & BS earning low rates of interest
Thanks
Paul

cfw1994

I and a number here are kind of averse to paying IFAs to manage what I would consider relatively 'simple' investments....but then I like shuffling money about, you sound more like you are a bit scared to do things with it!
Short answer: I am sure many IFAs would love to take charge of it for you....I imagine their fees might start around ½ to 1% each year to manage, with some kind of up-front fee, perhaps 2½-3%.   

To me, that is "wasted money" - 3% on 100k means any investments might have to do extraordinarily well this year to even match inflation, & of course even on a year like this where the value may have dropped 20% or more, those IFAs still (rightly) take their fees - but to many, it will be the price they pay not to worry. 
Your call - there is lots of very helpful information available - you're on the right site to look.

Reddit has a nice finance flowchart here, to help see where you are with your money.   Take a wander through that.

First question: how long are you wanting to invest for?   
You have posted this in the 'pensions' sub-forum here: is some (perhaps all!??) of it VERY long term, pension focussed? 
If so, perhaps you can add more to your pension, perhaps via "Salary Sacrifice" at work?   
Maybe even dump most of your salary in (£40k maximum in a year) & live for a while off some of the 100k cash instead - trickle it into a pension fund over many months, thus not worrying too much about 'buying the bottom' or things going downhill straight after an investment.

Beyond that, ISAs are the next best place to invest for 'tax savings'.  I'd personally be looking at something like a Vanguard low cost ISA for a bunch of it.  I follow a finance forum on PistonHeads, you (& others here!) could usefully have a look through the 'sticky' (first) thread up there, might give you some decent ideas - free guidance on offer from IM, which I have personally found VERY helpful....they offer similar investment options to Vanguard, as well as a few other choices.

You've left it too late to grab £20 allowance pre April 5th (assuming you don't have 20k sitting in your account, as you say you are "looking to withdraw" the funds).....but certainly I would aim to invest 20k in a S&S ISA for 20-21....perhaps drip feeding in over 12 months to smooth out the bumps.  For me, I would wallop £5k in to start (we may be near the bottom now, then a grand a month, then the rest of the 20k later in the year.  You can pick your level of risk in that kind of fund, and even potentially spread those.

Albermarle

I think ( my opinion only ) that IFA's are more useful/necessary if you have a more complicated financial situation ie trusts; tax issues ; potential inheritance tax liability; blended families etc .or just a very large amount of money to manage, especially when you are taking the pension.
Managing a £100K investment in a SIPP is relatively simple for a DIY'er, as long as you have some sensible idea of your own risk tolerance . With modern on line SIPP's and a cheap multi asset fund, it's not rocket science.

cloud_dog

cfw1994 said:

Beyond that, ISAs are the next best place to invest for 'tax savings'.  I'd personally be looking at something like a Vanguard low cost ISA for a bunch of it.  I follow a finance forum on PistonHeads, you (& others here!) could usefully have a look through the 'sticky' (first) thread up there, might give you some decent ideas - free guidance on offer from IM, which I have personally found VERY helpful....they offer similar investment options to Vanguard, as well as a few other choices.

Please don't point people at IM on PistonHeads, they and their clique are very defensive when you try to get to the bottom of their opaque charging structure (it seems to be SJP like, although I never managed to get to the bottom of it and obtain a clear information on charges).  It is almost cultish on the forum so, just be aware.

PaulCooper

Thanks for the replies, I don't think I made things clear in my original post, just to clarify
I'm already taking drawdown from my SIPP, the SIPP has some of it's funds invested in a building Society, it's part of these funds that I wish to transfer from the BS to something else, Therefore it's >£100k that is already held within a SIPP that I wish to enlist the help of an IFA to manage, unless of course I can do it easily myself, which to date I've been doing, albeit within bank accounts & BS accounts
Paul 

LHW99

How are you "invested in a building society" within a SIPP. Do you mean you have PIBs from one of the building societies? I didn't think normal DIY platforms offered building society accounts within the structure.

cfw1994

cloud_dog said:

cfw1994 said:

Beyond that, ISAs are the next best place to invest for 'tax savings'.  I'd personally be looking at something like a Vanguard low cost ISA for a bunch of it.  I follow a finance forum on PistonHeads, you (& others here!) could usefully have a look through the 'sticky' (first) thread up there, might give you some decent ideas - free guidance on offer from IM, which I have personally found VERY helpful....they offer similar investment options to Vanguard, as well as a few other choices.

Please don't point people at IM on PistonHeads, they and their clique are very defensive when you try to get to the bottom of their opaque charging structure (it seems to be SJP like, although I never managed to get to the bottom of it and obtain a clear information on charges).  It is almost cultish on the forum so, just be aware.

Are you kidding?  (sorry to derail your thread, OP, but this does need addressing!)
Their charges are singularly the most transparent of ANY financial product I have seen!

A fixed percent (depending on which fund you pick, clearly explained...0.57% to 0.87%, as you can see on their web site).
That fee includes: Investment management; Underlying fund; Dealing fees; Custody; Rebalancing; ISA wrapper; Pension wrapper; Taking tax free cash from your pension; Income drawdown from your pension; Purchasing and holding a commercial property doesn't carry an additional charge: Unlimited access to their Private Client team is also included (which is NOT for advice - they do not offer advice - but is for any “guidance” you might want

How is that complicated or shady.  Absolutely NOTHING like SJP!!
What makes you feel their are secretive or cultish?!  

Have you had any dealings with them at all?

(sorry OP....I do confess to being a customer of theirs, as are my wife and two children, all of whom understand why and what things cost!  Maybe we are all victims of some deep cult scam )

PaulCooper

Hi LHW99
It's a simple BS account that allows money from SIPPs, it pays about 1.5% I think
And cfw1994, it is deviating a little! but perhaps you can tell me who IM are?
Paul

dunstonh

That fee includes: Investment management; Underlying fund; Dealing fees; Custody; Rebalancing; ISA wrapper; Pension wrapper; Taking tax free cash from your pension; Income drawdown from your pension; Purchasing and holding a commercial property doesn't carry an additional charge: Unlimited access to their Private Client team is also included (which is NOT for advice - they do not offer advice - but is for any “guidance” you might want

How is that complicated or shady.  Absolutely NOTHING like SJP!!

Bundled charging is not transparent.  However, it is simple.  Bundled charging doesnt tell you how much each bit is costing you.  So, it lacks transparency and that makes it the same as SJP in that respect.  

HOWEVER, what they say on their website and what they then display on their client-specific documentation are likely to be two different things.   They retail GIA and ISAs so they have to be MIFIDII compliant.  So, whilst the 0.57% to 0.87% quote is not MIFIDII compliant, they almost certainly will have more detail when people sign up.   What we don't know is whether the 0.57% to 0.87% is inclusive of TC and IC or they are on top.  A lot of places still only use the OCF as the measure for marketing and not the total costs.   It is unclear what IM are using as there is no breakdown on their website.

So, I would say it is simple but not transparent based on what I can see.  There is a thread with over 130 pages on there. So, it is possible the transaction costs and incidental costs are mentioned somewhere in there.  I am not searching 130 pages to see but I cannot see them on the IM website.

As you invest with them, maybe you could tell us what the transaction costs and incidental costs have been disclosed as.  You probably got your annual cost and charges disclosure recently.   And maybe tell us what the investment % cost and provider % cost was to break it down as you would expect a fully transparent pricing structure to do.    

You would expect a MIFIDII compliant breakdown to be along the lines of the following:

provider/platform: a%

adviser b%

investment cost c%

Transaction costs d%

incidental/other costs e%

Total:  %

And cfw1994, it is deviating a little! but perhaps you can tell me who IM are?

IM= Intelligent money. They are site sponsors of Pistonheads and are allowed to promote their services on the forum.

cfw1994

To be a bit more specific, I believe IM are a site sponsor of the Finance sub-forum on PH (there are others elsewhere on PH, I believe!)
I've not seen a "MIFIDII breakdown" for you, Dunstonh, but I am assured there are no other transaction costs.
For example, a few weeks back I wanted to top our ISA up to the limit, but didn't want to drop it all in the market yet: they let you transfer the money and leave it in cash for a period of your choosing.
I asked if it was more costly to me to make several shifts from cash to the investment versus one purchase, and was assured there is not - they absorb all trading costs in the 0.67% on that particular fund.
I guess I must agree with your assertion that "Bundled charging is not transparent.  However, it is simple.  Bundled charging doesn't tell you how much each bit is costing you. ".
However.....whilst there is certainly a hint of accuracy in the next bit, I'd take a little issue with the "So, it lacks transparency and that makes it the same as SJP in that respect. "  - okay, I don't know how they spread that 0.57% to 0.87% cost..... ALL their funds cost less than 0.87% to manage - if you can show me some SJP customers paying less than even 1% on everything, I'll be impressed & surprised!    Also - IM make no charges to move AWAY....pretty sure SJP are famous for various lock-ins on that!
Clearly IM won't suit everyone, but I did feel the OP could take a browse even on the first few pages of that ludicrous thread and decide whether they want to read more!    I did mention Vanguard as a potential lower cost option (although that would be the ISA I was referring to...not so sure about their pension thing, which I keep reading "is not quite all there yet")
 

Malthusian

cfw1994 said:

cloud_dog said:

cfw1994 said:

Beyond that, ISAs are the next best place to invest for 'tax savings'.  I'd personally be looking at something like a Vanguard low cost ISA for a bunch of it.  I follow a finance forum on PistonHeads, you (& others here!) could usefully have a look through the 'sticky' (first) thread up there, might give you some decent ideas - free guidance on offer from IM, which I have personally found VERY helpful....they offer similar investment options to Vanguard, as well as a few other choices.

Please don't point people at IM on PistonHeads, they and their clique are very defensive when you try to get to the bottom of their opaque charging structure (it seems to be SJP like, although I never managed to get to the bottom of it and obtain a clear information on charges).  It is almost cultish on the forum so, just be aware.

Are you kidding?  (sorry to derail your thread, OP, but this does need addressing!)
Their charges are singularly the most transparent of ANY financial product I have seen!

CFW: "You should check out IM, it's like Vanguard except very expensive."

Cloud_Dog: "I would avoid IM, their clique is very defensive and almost cultish, and their charging structure isn't transparent."

CFW: *gets very defensive, outlines very opaque charging structure, and describes it as "the most transparent" which to anyone who hasn't cleared Operating Thetan it plainly isn't*

Well I'm sold.