IFA Withdrawal Request Timing?

Prism

Deleted_User said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

No experience with HL, but your description seems strange. During trading hours ETFs are traded in real time. You do not “accept” anything. You make an offer, which may or may not lead to a trade. Or you just buy/sell without a constraint on price. There is never a guarantee a trade will take place but if the stock is liquid and the offer is good, its very likely.  A slight delay in how the price is displayed is possible and is a function of your operating platform but your transaction will be completed based on the actuals at that moment in time. Its a good practice to use Limit Orders (Minimum price if you are selling) regardless of hours. And its not a good practice to trade outside market hours. And if you don’t use the Limit Order, there is no guarantee on the deal price. Could be better or worse than what you had seen displayed on screen. 

What Jamesd describes I also get on Youinvest. A 10 second offer that you can accept or refuse (and then try again). Or a limit order.

AnotherJoe

GSP said:

AnotherJoe said:

GSP said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

Thanks jamesd. I had to look up ETF - Exchange Traded Funds. Think reading through ETF’s aim to track the performance of a specific index such as the FTSE 100, so not sure if this would extend to all the other types of funds, stocks, bonds, equities etc that are usually held across a diverse portfolio.
I would never go it alone with looking after my own finds and would always use an IFA. It seems, if possible that to take out ALL the risk from your overall fund balance, you need to turn everything into cash on the day of instruction to the IFA to withdraw. The market can go up as well as down of course, but at least by doing this, if possible has frozen your balance, there is no risk of ‘wild’ movements? Once the money has been credited to your bank account 1, 2 or 3 weeks later, your fund is then turned back into all the investments you had previously.
Does this all sound feasible, and doable? 

It sounds idiotic and over time will lower the return from your investments because they will be in cash for an appreciable % of time. And its misplaced because all you are covering is the downside risk and forgetting the upside risk (eg it goes up after you sold) and statistically thats more likely to happen and absolutely certain over a long period.

Just keep (say) one years drawdown in cash, drawdown from that and occasionally top it up selling just what you need to top it up.

Really, with the shenanigans you are contemplating i wonder if investing is for you because you are so worried about the downside, and you'd be better with an annuity.

You seem to be soemone who might panic and go to cash every time theres a market drop and then you'll never get up the nerve to reinvest.

Yes agree, this is a bonkers idea as acknowledged in the Retirement Planner Key Info thread. I am not looking and trying to anticipate falls in the market, just looking at ways that might ‘maximise’ my fund.
Rather than sticking to a plan made 1,2,3 years previous, I am exploring the timing of withdrawals if there was some leeway in when these are done. Better to take from your fund if the balance is healthy rather than one that has contracted. If annuity rates ever picked up to an acceptable level, I’d certainly look at them. No, I would never panic, that bit you have got wrong, this is a marathon not a sprint. Sometimes it can be a case of just sitting tight and trying to make a better call on things rather than staying with a rigid planner.

The answer to that is keep it invested and not try to time the market, which essentially is what you are planning to do however much you try to pretend you arent. "I  am exploring the timing of withdrawals" - how is that not market timing?

Just sell on your regular basis, either each month / three months / six months / yearly / 137 days,  (whatever works for you) unless theres been a  crash (of a magnitude as determined by you)  in which case take some out of your cash buffer instead and dont sell  anything or sell less and take out less, depending how severe a crash and what flexibility you have .

kangoora

I was planning to take £12.5k this year from my fund in April - Covid happened and I left it alone and spent some cash reserves.

Last week I withdrew £12.5k after my portfolio had increased back to more than the value before the Covid drop. Realistically I had been up for quite a while before making the withdrawal.

Timing the market?

GSP

AnotherJoe said:

GSP said:

AnotherJoe said:

GSP said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

Thanks jamesd. I had to look up ETF - Exchange Traded Funds. Think reading through ETF’s aim to track the performance of a specific index such as the FTSE 100, so not sure if this would extend to all the other types of funds, stocks, bonds, equities etc that are usually held across a diverse portfolio.
I would never go it alone with looking after my own finds and would always use an IFA. It seems, if possible that to take out ALL the risk from your overall fund balance, you need to turn everything into cash on the day of instruction to the IFA to withdraw. The market can go up as well as down of course, but at least by doing this, if possible has frozen your balance, there is no risk of ‘wild’ movements? Once the money has been credited to your bank account 1, 2 or 3 weeks later, your fund is then turned back into all the investments you had previously.
Does this all sound feasible, and doable? 

It sounds idiotic and over time will lower the return from your investments because they will be in cash for an appreciable % of time. And its misplaced because all you are covering is the downside risk and forgetting the upside risk (eg it goes up after you sold) and statistically thats more likely to happen and absolutely certain over a long period.

Just keep (say) one years drawdown in cash, drawdown from that and occasionally top it up selling just what you need to top it up.

Really, with the shenanigans you are contemplating i wonder if investing is for you because you are so worried about the downside, and you'd be better with an annuity.

You seem to be soemone who might panic and go to cash every time theres a market drop and then you'll never get up the nerve to reinvest.

Yes agree, this is a bonkers idea as acknowledged in the Retirement Planner Key Info thread. I am not looking and trying to anticipate falls in the market, just looking at ways that might ‘maximise’ my fund.
Rather than sticking to a plan made 1,2,3 years previous, I am exploring the timing of withdrawals if there was some leeway in when these are done. Better to take from your fund if the balance is healthy rather than one that has contracted. If annuity rates ever picked up to an acceptable level, I’d certainly look at them. No, I would never panic, that bit you have got wrong, this is a marathon not a sprint. Sometimes it can be a case of just sitting tight and trying to make a better call on things rather than staying with a rigid planner.

The answer to that is keep it invested and not try to time the market, which essentially is what you are planning to do however much you try to pretend you arent. "I  am exploring the timing of withdrawals" - how is that not market timing?

Just sell on your regular basis, either each month / three months / six months / yearly / 137 days,  (whatever works for you) unless theres been a  crash (of a magnitude as determined by you)  in which case take some out of your cash buffer instead and dont sell  anything or sell less and take out less, depending how severe a crash and what flexibility you have .

The only timing feature I am looking at is withdrawing when my fund has grown rather than withdrawing when it has contracted and delaying that decision on the latter if possible. Is it beneficial to withdraw when your fund has grown, rather than withdraw when your fund balance has fallen?

[Deleted User]

Prism said:

Deleted_User said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

No experience with HL, but your description seems strange. During trading hours ETFs are traded in real time. You do not “accept” anything. You make an offer, which may or may not lead to a trade. Or you just buy/sell without a constraint on price. There is never a guarantee a trade will take place but if the stock is liquid and the offer is good, its very likely.  A slight delay in how the price is displayed is possible and is a function of your operating platform but your transaction will be completed based on the actuals at that moment in time. Its a good practice to use Limit Orders (Minimum price if you are selling) regardless of hours. And its not a good practice to trade outside market hours. And if you don’t use the Limit Order, there is no guarantee on the deal price. Could be better or worse than what you had seen displayed on screen. 

What Jamesd describes I also get on Youinvest. A 10 second offer that you can accept or refuse (and then try again). Or a limit order.

For ETFs and stocks? Weird. Guess your broker serves as a market maker and takes a cut on every deal. Otherwise they would be taking on risk for nothing. 

Also, what is stopping people from watching the ticker in real time on days with high volatility and making money in second 10 when the market moves the right way? I am assuming this is prevented by the “offer” price being lower/higher than the actual by a sufficient margin and to your disadvantage. 

Prism

Deleted_User said:

Prism said:

Deleted_User said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

No experience with HL, but your description seems strange. During trading hours ETFs are traded in real time. You do not “accept” anything. You make an offer, which may or may not lead to a trade. Or you just buy/sell without a constraint on price. There is never a guarantee a trade will take place but if the stock is liquid and the offer is good, its very likely.  A slight delay in how the price is displayed is possible and is a function of your operating platform but your transaction will be completed based on the actuals at that moment in time. Its a good practice to use Limit Orders (Minimum price if you are selling) regardless of hours. And its not a good practice to trade outside market hours. And if you don’t use the Limit Order, there is no guarantee on the deal price. Could be better or worse than what you had seen displayed on screen. 

What Jamesd describes I also get on Youinvest. A 10 second offer that you can accept or refuse (and then try again). Or a limit order.

For ETFs and stocks? Weird. Guess your broker serves as a market maker and takes a cut on every deal. Otherwise they would be taking on risk for nothing. 

Also, what is stopping people from watching the ticker in real time on days with high volatility and making money in second 10 when the market moves the right way? I am assuming this is prevented by the “offer” price being lower/higher than the actual by a sufficient margin and to your disadvantage. 

I'm not sure. Sometimes when you get the offer to buy it is the same as the listed price, sometimes its lower, sometimes higher. I don't follow the live price during that 10 seconds.

Audaxer

Prism said:

BritishInvestor said:

AlanP_2 said:

BritishInvestor said:

AlanP_2 said:

Unless it is an unexpected requirement I would have thought most people would be planning their drawdown strategy for at least the next year if not the next 2 or 3 years?

What I would do is in the 12/24 months leading up to starting drawdown sell the next 12/24 months amounts and leave the pension in cash in the SIPP. At the start of drawdown carry on with the same approach so that you always have 12 to 24 months cash available and not subject to vagaries of market.

Holding an amount of cash outside the pension, say another 12 months worth, adds flexibility around halting sales whilst markets are falling and adjusting up again once markets have stabilised and (hopefully) gone back up.

If there are transaction fees per sale / per investment then quarterly or annual selling may be better.

In summary, I wouldn't want to be selling on a whim if I could avoid it.

"adds flexibility around halting sales whilst markets are falling and adjusting up again once markets have stabilised and (hopefully) gone back up."
Just equity markets or bond markets as well?

I'm not at this point yet so my comment was more generic than specific re asset classes. But to answer your question as my main investments would be in multi-asset funds then both.

Given that it's the multi-year market drawdowns (potentially coupled with inflation) that tend to put retirement pots under stress I'm not sure that having a year or two in cash is going to deliver what you seek.

Yeah, I see the 1-2 years of cash idea mentioned quite a bit. It doesn't even come close to working in a stress scenario where someone needs to be able to cope with possibly 15-20 years of negative equity returns while being hit with above average inflation. 

I think if there was a realistic chance of that happening with a balanced portfolio, I don't think it would be worth the risk of investing. If that happened I don't think that many DC pots would last for a 30 year retirement.

Audaxer

GSP said:

AnotherJoe said:

GSP said:

AnotherJoe said:

GSP said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

Thanks jamesd. I had to look up ETF - Exchange Traded Funds. Think reading through ETF’s aim to track the performance of a specific index such as the FTSE 100, so not sure if this would extend to all the other types of funds, stocks, bonds, equities etc that are usually held across a diverse portfolio.
I would never go it alone with looking after my own finds and would always use an IFA. It seems, if possible that to take out ALL the risk from your overall fund balance, you need to turn everything into cash on the day of instruction to the IFA to withdraw. The market can go up as well as down of course, but at least by doing this, if possible has frozen your balance, there is no risk of ‘wild’ movements? Once the money has been credited to your bank account 1, 2 or 3 weeks later, your fund is then turned back into all the investments you had previously.
Does this all sound feasible, and doable? 

It sounds idiotic and over time will lower the return from your investments because they will be in cash for an appreciable % of time. And its misplaced because all you are covering is the downside risk and forgetting the upside risk (eg it goes up after you sold) and statistically thats more likely to happen and absolutely certain over a long period.

Just keep (say) one years drawdown in cash, drawdown from that and occasionally top it up selling just what you need to top it up.

Really, with the shenanigans you are contemplating i wonder if investing is for you because you are so worried about the downside, and you'd be better with an annuity.

You seem to be soemone who might panic and go to cash every time theres a market drop and then you'll never get up the nerve to reinvest.

Yes agree, this is a bonkers idea as acknowledged in the Retirement Planner Key Info thread. I am not looking and trying to anticipate falls in the market, just looking at ways that might ‘maximise’ my fund.
Rather than sticking to a plan made 1,2,3 years previous, I am exploring the timing of withdrawals if there was some leeway in when these are done. Better to take from your fund if the balance is healthy rather than one that has contracted. If annuity rates ever picked up to an acceptable level, I’d certainly look at them. No, I would never panic, that bit you have got wrong, this is a marathon not a sprint. Sometimes it can be a case of just sitting tight and trying to make a better call on things rather than staying with a rigid planner.

The answer to that is keep it invested and not try to time the market, which essentially is what you are planning to do however much you try to pretend you arent. "I  am exploring the timing of withdrawals" - how is that not market timing?

Just sell on your regular basis, either each month / three months / six months / yearly / 137 days,  (whatever works for you) unless theres been a  crash (of a magnitude as determined by you)  in which case take some out of your cash buffer instead and dont sell  anything or sell less and take out less, depending how severe a crash and what flexibility you have .

The only timing feature I am looking at is withdrawing when my fund has grown rather than withdrawing when it has contracted and delaying that decision on the latter if possible. Is it beneficial to withdraw when your fund has grown, rather than withdraw when your fund balance has fallen?

Yes, it's better to withdraw money from your portfolio when it has grown, but you only need to sell as much as you need for the lump sum withdrawal. It's not a good idea to liquidate the whole portfolio as you suggested earlier.

GSP

Audaxer said:

GSP said:

AnotherJoe said:

GSP said:

AnotherJoe said:

GSP said:

jamesd said:

GSP said:

In drawdown, from your request to your IFA to take x amount from your fund, how long does it take before your fund is debited and your bank account credited

If not using an IFA but instead giving online instructions at a place like HL:

1. sell ETF or investment trust and you'll be quoted a price with about ten seconds to accept. Accept and the deal is done at that price and shows up in lists of recent trades. Outside market hours you can set a minimum price if you want the deal done when the market next opens.
2. give an instruction to sell an ordinary fund by 8AM and the noon price on that day will be used. Later, the next day though you can cancel before 8AM.

In both cases settlement - the cash arriving in the account - is the standard three days later. You can then ask to withdraw the money.

So your exposure to market moves without an IFA in the middle can be none at all to four hours.

Thanks jamesd. I had to look up ETF - Exchange Traded Funds. Think reading through ETF’s aim to track the performance of a specific index such as the FTSE 100, so not sure if this would extend to all the other types of funds, stocks, bonds, equities etc that are usually held across a diverse portfolio.
I would never go it alone with looking after my own finds and would always use an IFA. It seems, if possible that to take out ALL the risk from your overall fund balance, you need to turn everything into cash on the day of instruction to the IFA to withdraw. The market can go up as well as down of course, but at least by doing this, if possible has frozen your balance, there is no risk of ‘wild’ movements? Once the money has been credited to your bank account 1, 2 or 3 weeks later, your fund is then turned back into all the investments you had previously.
Does this all sound feasible, and doable? 

It sounds idiotic and over time will lower the return from your investments because they will be in cash for an appreciable % of time. And its misplaced because all you are covering is the downside risk and forgetting the upside risk (eg it goes up after you sold) and statistically thats more likely to happen and absolutely certain over a long period.

Just keep (say) one years drawdown in cash, drawdown from that and occasionally top it up selling just what you need to top it up.

Really, with the shenanigans you are contemplating i wonder if investing is for you because you are so worried about the downside, and you'd be better with an annuity.

You seem to be soemone who might panic and go to cash every time theres a market drop and then you'll never get up the nerve to reinvest.

Yes agree, this is a bonkers idea as acknowledged in the Retirement Planner Key Info thread. I am not looking and trying to anticipate falls in the market, just looking at ways that might ‘maximise’ my fund.
Rather than sticking to a plan made 1,2,3 years previous, I am exploring the timing of withdrawals if there was some leeway in when these are done. Better to take from your fund if the balance is healthy rather than one that has contracted. If annuity rates ever picked up to an acceptable level, I’d certainly look at them. No, I would never panic, that bit you have got wrong, this is a marathon not a sprint. Sometimes it can be a case of just sitting tight and trying to make a better call on things rather than staying with a rigid planner.

The answer to that is keep it invested and not try to time the market, which essentially is what you are planning to do however much you try to pretend you arent. "I  am exploring the timing of withdrawals" - how is that not market timing?

Just sell on your regular basis, either each month / three months / six months / yearly / 137 days,  (whatever works for you) unless theres been a  crash (of a magnitude as determined by you)  in which case take some out of your cash buffer instead and dont sell  anything or sell less and take out less, depending how severe a crash and what flexibility you have .

The only timing feature I am looking at is withdrawing when my fund has grown rather than withdrawing when it has contracted and delaying that decision on the latter if possible. Is it beneficial to withdraw when your fund has grown, rather than withdraw when your fund balance has fallen?

Yes, it's better to withdraw money from your portfolio when it has grown, but you only need to sell as much as you need for the lump sum withdrawal. It's not a good idea to liquidate the whole portfolio as you suggested earlier.

No, it was an idea I have totally gone off as pointed out it’s problem.

Prism

Audaxer said:

Prism said:

BritishInvestor said:

AlanP_2 said:

BritishInvestor said:

AlanP_2 said:

Unless it is an unexpected requirement I would have thought most people would be planning their drawdown strategy for at least the next year if not the next 2 or 3 years?

What I would do is in the 12/24 months leading up to starting drawdown sell the next 12/24 months amounts and leave the pension in cash in the SIPP. At the start of drawdown carry on with the same approach so that you always have 12 to 24 months cash available and not subject to vagaries of market.

Holding an amount of cash outside the pension, say another 12 months worth, adds flexibility around halting sales whilst markets are falling and adjusting up again once markets have stabilised and (hopefully) gone back up.

If there are transaction fees per sale / per investment then quarterly or annual selling may be better.

In summary, I wouldn't want to be selling on a whim if I could avoid it.

"adds flexibility around halting sales whilst markets are falling and adjusting up again once markets have stabilised and (hopefully) gone back up."
Just equity markets or bond markets as well?

I'm not at this point yet so my comment was more generic than specific re asset classes. But to answer your question as my main investments would be in multi-asset funds then both.

Given that it's the multi-year market drawdowns (potentially coupled with inflation) that tend to put retirement pots under stress I'm not sure that having a year or two in cash is going to deliver what you seek.

Yeah, I see the 1-2 years of cash idea mentioned quite a bit. It doesn't even come close to working in a stress scenario where someone needs to be able to cope with possibly 15-20 years of negative equity returns while being hit with above average inflation. 

I think if there was a realistic chance of that happening with a balanced portfolio, I don't think it would be worth the risk of investing. If that happened I don't think that many DC pots would last for a 30 year retirement.

Thats really my point though, a balanced portfolio of equities and bonds with a sensible withdrawal rate has always historically survived it. These long equity downturns are historically survived by having a decent allocation to bonds and a global allocation of equities. The 4% rule with a 60/40 pretty much comes from a starting retirement in 1968 as being the worst time ever with many years of terrible US equity returns

However I see talk of 90-100% equities, with a US focus and a couple of years in cash to ride out a crash. For this all to work as it has before there needs to be investment in something that goes up when equities go down or inflation goes up.