Wealth Management to DIY SIPP

dunstonh

KIID show risk 5/7 for both funds whereas HSBC GS Balanced at 4/7

That is not an accurate measure of risk though.  a) KIID risk scores are woeful.  b) it scores the fund in isolation (i.e. if 100% was put in that fund).  You have a split which will result in some diversification benefit.

Didn’t blink through Covid which might not have been a huge correction however. I have cash reserve to ride out and not sell at a loss.

Huge maybe but only the third largest fall from peak to trough in the last 25 years.   

A typical IFA overall charge would be in the region 1.2% to 1.8%

The typical minimum would be around 0.85% all in.   

A DIY charge using  active funds would be say 0.7% to 1.2%

Given the high number of DIY investors in HL's multi-manager funds, its probably fair to expand that 1.2% to 2.0%.  

When I went through the risk survey I originally had no idea about the large corrections and what I’d do in that situation, but have a better idea now. 

Funny enough, 2022 has spooked more investors than 2020.  It's more similar to the early part of the millennium which had three negative years in a row.    Long drawn-out negative periods tend to see people react differently to short sharp drops.

AltaNate

dunstonh said:

You have a split which will result in some diversification benefit.

Some diversification as top ten holdings in both funds have 8 common holdings in slightly different percentages that account for approximately 35% of total of each. I think it’s two funds to get a blend to meet the calculated risk rating.

Albermarle

The typical minimum would be around 0.85% all in.   
OK as a minimum, but I do not ever recall a poster coming on the forum with an IFA paying so little. Maybe the ones that are do not complain !

Given the high number of DIY investors in HL's multi-manager funds, its probably fair to expand that 1.2% to 2.0%
OK HL's multi manager fund investors are the exception that proves the rule.

dunstonh

The typical minimum would be around 0.85% all in.   
OK as a minimum, but I do not ever recall a poster coming on the forum with an IFA paying so little. Maybe the ones that are do not complain !

Not difficult.  Indeed, this morning I have completed a review where the platform charge is 0.16%, OCF 0.09% and adviser charge 0.50% = 0.75%.     But even a mid range IFA platform charge of 0.25% plus the same OCF and adviser charge is 0.84%.       Lots of IFAs are using passives and hybrid portfolios nowadays.    Its the ones that jump in with the expensive platforms, high adviser charge, DFM charge and fully active portfolios that often appear here because their charges appear so much higher.

Given the high number of DIY investors in HL's multi-manager funds, its probably fair to expand that 1.2% to 2.0%
OK HL's multi manager fund investors are the exception that proves the rule.

HL are the biggest DIY platform by a long way and two of their MM funds do regularly appear in their top 10 used.   So, not that much exception.    Some of the other platforms have introduced fairly expensive in-house propositions too hoping get that extra cut of money from in-house funds.

Experienced DIY investors (or those that put the effort in) are not typical of your average DIY investor in the wider world.  

older_and_no_wiser

AltaNate said:

My question and proposal is to transfer to low cost platform possibly ii with their low fixed fee Pension Builder plan SIPP and invest initially into a mainstream multi asset fund such as Global Strategy, Life Strategy, MyMap or similar.

Just do it! I transferred across into II a few years back. Their fixed fee model saves me a LOT of money each year. Once you have over a certain amount in your SIPP then it makes sense. As an example, for your £210K pot, you'd pay HL almost £1000 a year just in platform fees (0.45% of pot). At II this will be £156 (£12.99 a month). Of course that gap will widen as you contribute more into the SIPP and it (hopefully!) grows.

I think you have the right idea about going into a multi-asset fund. I have both HSBC GS Dynamic and BlackRock MyMap 6 plus a few other satellite funds for small caps in UK and global tracker (just a small % of the portfolio).Multi-asset funds take the stress out of investing.

older_and_no_wiser

barnstar2077 said:

Personally I think these forums are worth their weight in gold for stopping me from doing anything too stupid! :  )

Agreed! I've learnt so much on here and extremely grateful for all the wise advice I've been given over the last few years. I've gone from being completely ignorant about pensions and investing to a full DIY person who's confident about the future and has a plan mapped out - complete with boring spreadsheets and lots of YouTube channel subscriptions!

AltaNate

older_and_no_wiser said:

I think you have the right idea about going into a multi-asset fund. I have both HSBC GS Dynamic and BlackRock MyMap 6 plus a few other satellite funds for small caps in UK and global tracker (just a small % of the portfolio).Multi-asset funds take the stress out of investing.

Yep these two are on the list for consideration as you say for reduced stress.