Should we split our SIPPs so all eggs not in one basket?

MissBojangles

I (54) have £385k (soon to be £470k) in an Aegon Retirement Choices SIPP (untouched).  Hubby (61) has £225k in his Aegon SIPP and is in drawdown.
My question is - are we daft to have all our eggs in this one (Aegon) basket?  I cant help feeling we should be splitting it up a bit...
TIA

dunstonh

I (54) have £385k (soon to be £470k) in an Aegon fully managed SIPP (untouched). 

What investments are you using?

Aegon have a range of pension products across different platforms/brands  (Aegon Scottish Equitable, RetireReady, Retirement Choices, Aegon Cofunds, One Retirement).    Aegon do not have a product called "fully managed SIPP".   So, which are you with?

The relevance will be what type of investments you are using.  e.g. insured funds with their 100% FSCS protection, UT/OEICs with their £85k per fund house FSCS protection or ETFs/ITs with no FSCS protection.

My question is - are we daft to have all our eggs in this one (Aegon) basket? 

The eggs in one basket has more to do with how you invest rather than the administrator for your pension paperwork.

MissBojangles

dunstonh said:

I (54) have £385k (soon to be £470k) in an Aegon fully managed SIPP (untouched). 

What investments are you using?

Aegon have a range of pension products across different platforms/brands  (Aegon Scottish Equitable, RetireReady, Retirement Choices, Aegon Cofunds, One Retirement).    Aegon do not have a product called "fully managed SIPP".   So, which are you with?

The relevance will be what type of investments you are using.  e.g. insured funds with their 100% FSCS protection, UT/OEICs with their £85k per fund house FSCS protection or ETFs/ITs with no FSCS protection.

My question is - are we daft to have all our eggs in this one (Aegon) basket? 

The eggs in one basket has more to do with how you invest rather than the administrator for your pension paperwork.

It's Aegon Retirement Choices - I have edited the original post (thanks :-))

dunstonh

ARC offers UT/OEICs, insured funds and access to DFMs.    
People put millions of pounds on platforms.  You are with a financially strong platform that has a track record of buying other platforms that are not as strong.    It's not some niche non-mainstream outfit where you need to take more care.

nrsql

Depends on your attitude to risk. I don't place everything with a single provider - hence investments are with 4 different providers and I have 5 different personal bank accounts. It's mainly in case something goes wrong then it doesn't affect everything. For your SIPP it is possible that the company could have issues but if you diversify you are increasing the risk of problems but decreasing the risk that all your SIPP assets will be affected.
You need to decide if that is a concern for you and whether it is worth the extra effort - but then what do you do if companies merge?

kidmugsy

STINKLER said: are we daft to have all our eggs in this one (Aegon) basket?

If our SIPPs were the size of yours we would certainly split them up.  The idea that diversification can't possibly have any rewards in this matter seems daft to me.  One reward I'd pretty much guarantee: we'd sleep better.

AnotherJoe

The main reason to split would be, say there was an issue which affected drawdown. MIght be a computer error, might be internal fraud, who knows.

Whilst id be confident you'd not lose money eventually, it might take months to sort it out with no access whilst its ongoing. Unlikely but possible. Very unlikely.

Eggs in two baskets would help in that very unlikely event and woudlnt harm you at all since its in two different peoples names anyway so its not as if you might have issues rebalancing if you split one persons account into two.

dunstonh

Aegon ARC has tiered charges.   So, splitting the pensions up would increase charges.   I don't think they have family linking though.  So, if you really are paranoid about it, then split it that you are with one provider and your husband another.

Just remember though that sending it to a provider that uses the same software as Aegon wont actually help.  And if you send it to a provider with weaker financials, you may actually increase the virtually non-existent risks.

cloud_dog

The current and ongoing Prudential fiasco springs to mind.

dunstonh

cloud_dog said:

The current and ongoing Prudential fiasco springs to mind.

I knew someone was going to mention that.    However, it is the Pru legacy book that has issues.  Legacy book problems are more commonplace than most realise.    However, I wouldn't personally compare migrations of legacy hard coded plans onto newer custom built systems the same as most modern platform software.  There are still some platforms using in-house coding but most have moved to using third party software now and tend to run many versions behind to allow for problems to be ironed out before they move to it.