Thinking about transferring SIPP from one provider to another

Sunnylifeover50plan

Morning

I'm considering moving my SIPP from one provider to another and at the same time changing how I am invested.

I am 52 and want to start drawing approximately £18k per annum, not taking a lump sum, from age 55 or 56. I want to have a relatively low fee/ charges approach and hold my investment rather than have to keep tweaking/ rebalancing it. My risk appetite is medium.

It's likely that if I transfer into another provider it will be in cash after selling down my existing holdings before buying into a Vanguard lifestyle 40 accumulation fund. I currently have around £600k of value in my existing investments.

The main drivers here are; low maintenance, low cost and easy accessibility. 

I am looking at AJ Bell which as a platform seems to offer me what I want. I'm a little worried as my wife has an AJ Bell SIPP and also holds Vanguard LS 40 - is it foolish for me to put all of my eggs in one basket (provider and fund) even though the fund is well diversified?

Finally I currently live in the EU and as such AJ Bell stacks up given they will allow me to transfer in and transact post Brexit.

Other info; my wife is 55 entitled to a full new state pension and I am currently 3 years short (been online to check full years and projected entitlement) My wife has a SIPP and is currently drawing a modest amount - we expect her SIPP to be exhausted at the same time her state pension kicks in. We have cash reserves to cover 4 years of living expenses and own our home.

Thanks

[Deleted User]

The risk isn’t zero but its very small.  If something were to go wrong with AJB, you would likely get your assets but there could be a few months delay before you can access them.  

Notepad_Phil

With £600k you may want to look at someone like ii.co.uk as they are a fixed price platform. Unfortunately I don't know whether they would be okay given your EU circumstances, but I suspect they may be quite a bit cheaper that AJ Bell for your amount of money.

older_and_no_wiser

Notepad_Phil said:

With £600k you may want to look at someone like ii.co.uk as they are a fixed price platform. Unfortunately I don't know whether they would be okay given your EU circumstances, but I suspect they may be quite a bit cheaper that AJ Bell for your amount of money.

Agreed. II is better for this large amount - £20 a month fixed and they waive their £9.99 monthly SIPP fee for the first 6 months (if this offer is still going). II also have a huge amount of funds to choose from - including all the Vanguard ones.

Albermarle

I would also be concerned that both of you were invested in VLS40 . Not because of any possibility that Vanguard might go bust but that VLS 40 might underperform compared to similar funds . Also 40% equity and 60% bonds is not an ideal mix, in some peoples eyes anyway.
I know you want to keep it simple but probably this is taking it one step too far.
You should at least consider  alternative multi asset funds as they are not all quite the same .
HSBC global strategy and Blackrock mymap are also cheaper than VLS. 

older_and_no_wiser

Sunnylifeover50plan said:

I'm a little worried as my wife has an AJ Bell SIPP and also holds Vanguard LS 40 - is it foolish for me to put all of my eggs in one basket (provider and fund) even though the fund is well diversified?

I would think the majority of those who know about investing would say that a Vanguard LS fund is a good single fund option. Your eggs aren't really in one basket as it's a well diversified fund (apart from a slight UK bias). Alternative multi-asset funds are available such as HSBC Global Strategy and BlackRock MyMap. You could check out the asset spread across equities and bonds etc on each one by checking their factsheets or looking on Trustnet/Morningstar.

[Deleted User]

Albermarle said:

I would also be concerned that both of you were invested in VLS40 . Not because of any possibility that Vanguard might go bust but that VLS 40 might underperform compared to similar funds . Also 40% equity and 60% bonds is not an ideal mix, in some peoples eyes anyway.
I know you want to keep it simple but probably this is taking it one step too far.
You should at least consider  alternative multi asset funds as they are not all quite the same .
HSBC global strategy and Blackrock mymap are also cheaper than VLS. 

Any single fund or a combination of funds may under or outperform.  This would be a bad reason to buy another fund.

The logic of having multi-asset funds is that its all you need. The whole world in one product.  If you want more than one fund then don’t go for VLS and Blackrock; buy one with just equities and another one with bonds. 

In general, the cost difference between VLS40 and IShares/HSBC versions is too small compared to the more important differences in how the funds are designed. If you like the concept of a particular fund, that should take priority.

I have more than one product because single fund products were not available when I set up the portfolio, and because it gives me more choice, control, tax efficiency and flexibility, but today I would have likely picked a single fund.  Simple is beautiful. 

Albermarle

Deleted_User said:

Albermarle said:

I would also be concerned that both of you were invested in VLS40 . Not because of any possibility that Vanguard might go bust but that VLS 40 might underperform compared to similar funds . Also 40% equity and 60% bonds is not an ideal mix, in some peoples eyes anyway.
I know you want to keep it simple but probably this is taking it one step too far.
You should at least consider  alternative multi asset funds as they are not all quite the same .
HSBC global strategy and Blackrock mymap are also cheaper than VLS. 

Any single fund or a combination of funds may under or outperform.  This would be a bad reason to buy another fund.

The logic of having multi-asset funds is that its all you need. The whole world in one product.  If you want more than one fund then don’t go for VLS and Blackrock; buy one with just equities and another one with bonds. 

In general, the cost difference between VLS40 and IShares/HSBC versions is too small compared to the more important differences in how the funds are designed. If you like the concept of a particular fund, that should take priority.

I have more than one product because single fund products were not available when I set up the portfolio, and because it gives me more choice, control, tax efficiency and flexibility, but today I would have likely picked a single fund.  Simple is beautiful. 

Good points but personally I think it makes sense to have more than one multi asset fund , even if they are both at similar risk levels .
At least one with a fixed allocation of equities and bonds ( like VLS) and one which is risk targeted with a moving allocation .
Just to even out any performance discrepancies . Or one with a UK bias and one without etc .

[Deleted User]

Albermarle said:

Deleted_User said:

Albermarle said:

I would also be concerned that both of you were invested in VLS40 . Not because of any possibility that Vanguard might go bust but that VLS 40 might underperform compared to similar funds . Also 40% equity and 60% bonds is not an ideal mix, in some peoples eyes anyway.
I know you want to keep it simple but probably this is taking it one step too far.
You should at least consider  alternative multi asset funds as they are not all quite the same .
HSBC global strategy and Blackrock mymap are also cheaper than VLS. 

Any single fund or a combination of funds may under or outperform.  This would be a bad reason to buy another fund.

The logic of having multi-asset funds is that its all you need. The whole world in one product.  If you want more than one fund then don’t go for VLS and Blackrock; buy one with just equities and another one with bonds. 

In general, the cost difference between VLS40 and IShares/HSBC versions is too small compared to the more important differences in how the funds are designed. If you like the concept of a particular fund, that should take priority.

I have more than one product because single fund products were not available when I set up the portfolio, and because it gives me more choice, control, tax efficiency and flexibility, but today I would have likely picked a single fund.  Simple is beautiful. 

Good points but personally I think it makes sense to have more than one multi asset fund , even if they are both at similar risk levels .
At least one with a fixed allocation of equities and bonds ( like VLS) and one which is risk targeted with a moving allocation .
Just to even out any performance discrepancies . Or one with a UK bias and one without etc .

Getting one of each fund = UK bias.  VLS 40 will give you 10% in UK equity.  Mix it up with a “no bias” fund, you’ll end up with 6% rather than 10%. 90% “rest of the world” vs 94%. And the exact same return expectation.  I am struggling to see it being worth the extra hassle. 

Albermarle

 I am struggling to see it being worth the extra hassle. 

If you have 600K with VLS 40 on a normal investment platform , you can sell £300K and buy HSBC global strategy in approx 30 seconds on some platforms . Then nothing else to do but occasionally monitor performance .
So you might not agree with it but you can not really say that is a hassle.

[Deleted User]

Albermarle said:

 I am struggling to see it being worth the extra hassle. 

If you have 600K with VLS 40 on a normal investment platform , you can sell £300K and buy HSBC global strategy in approx 30 seconds on some platforms . Then nothing else to do but occasionally monitor performance .
So you might not agree with it but you can not really say that is a hassle.

Are you going to start rebalancing it? Now that you have a couple of funds, are you going to monitor performance separately?  Will you be tempted to start messing and introducing human decision making and emotion at regular intervals? 

You have taken away the main advantage of having an all-in-one (buy and forget) fund for nothing.  If you are going down that path then get an equity fund and a separate bond fund and at least you will have some genuine advantages to show for it.