more SIPP dilemmas

gm0

I am not recommending anything.  Innapropriate.

A packaged fund from a big and safe provider is a reasonable choice if you don't know more about investing to do something else.  It won't be the best.  It won't be the worst.   A major mistake is unlikely.  But you need to decide which risk tier you should live in.

The investment risk you should take - based on your finances (£ capacity for loss, goals, income, inheritance, and attitude) is a decision you make for yourself with or without an adviser's recommendation. 

This is quite different while saving and a long way from retirement from when you are selling down accumulated capital in retirement.  Much higher risk taking may be highly appropriate a long way out in accumulation.  Buying every month means - buying the peaks and the dips.   But the decision you need to make is still there for both phases of life.  And some of us are more hard wired to loss aversion.  I accumulated at 100% equities.  I have dialed it back in drawdown.  During accumulation (at 100%) my pension pot - just halved in value - one particular year.  It grew back but there was no way to know how or when that would happen and over how long.  The units I bought in that dip were - of course - half price.  Easy to miss in the emotional response.

An adviser (whether it is VG or IFA) will capture info from you and can help form that judgement around risk. 
Pot. Income. Goals. This is at the heart of what a "suitable" portfolio recommendation is about.

I ended up DIY but went through a low cost cut down regulated fact find with an adviser as well so I do know the regulated process to a degree.

Income from capital and returns and pot size calculations are what they are.  Allowing for state pension(s). 

The personal attitude to risk stuff is essentially - driven by the inputs you give the adviser fairly directly in response to Q&A.  This strongly influences the response you get back. 

If you oversell or undersell your atittude to investment risk taking / level of caution.  They will write it down (for their protection) so that the recommendation is suitable *based on what you told them*. And recommend a risk tiered portfolio from their curated list of portfolios and providers by category.  And it will be in very much the "zone" you have guided them to. Via the structured q&a.  They do this a lot and may be more or less careful.  But doing it a lot means they know what to ask and how to tease it out of you. 

You either work it out for yourself via book study and forums and filling out a web attitude questionnaire on a provider site or two.  Or you pay someone an initial charge (variable), and perhaps an ongoing advice fee (the 0.3% for VG, or 0.5% for IFA).  In return they sort it.  Do admin.  And with ongoing advice there is an element of monitoring and review and rebalancing and adjusting income type of activity.  And an annual touch point with you.  

DIY all that adjust in flight stuff happens only if you go and do it yourself.

The setup part takes some learning - language and to be confident handling uncertainty.  And then portfolio choosing.  But it isn't actually super difficult as an admin activity.

The part that does make DIY challenging is the torturous subject of fund manager / fund monitoring. As a consumer - you don't really have a good source of data to do this at all.  You can see what *has* happened to your funds- past performance - fact sheets.  Trustnet. Morningstar.  But you don't have much data and insight into what is going on under the covers.  IFAs often don't either directly. 

To get more they subscribe to analysis data services for this which make perfect sense across a pool of customers but not as an individual in most cases. Your only real risk management approach for "fund manager monitoring" as an individual - is to use several of them, to buy reputable, and then largely hope for the best.  By the time it hits the mainstream news like the Woodford scandal or property fund/REIT lockups - it will likely be too late and you are caught in the event - whatever it is.

Confidence that the a solution you choose is OK can be difficult to build quickly.  Advice is there to deal with that issue.  And it does.  For a known price

Personally I am not a fan of the highly leveraged low cost advice model with minimal advisor time per client i.e the pension review/transfer farmers or even perhaps Vanguard at 0.3%.  I don't know about VG as I have not used that one.  

My view is that the actual value of an advice relationship is in their knowledge of the market and the tax code and guidance on other aspects of planning overall family finances where rules are overlaid and interact. 

It is not found in picking a risk tier and a portfolio you could have built DIY.  The highly leveraged version advice model won't bundle much of that "other advice" in.  A "proper" IFA will do a bit more.  So the decision is whether you need that "other advice" or not - based on you, your family, your financial affairs.

martin7575

@dunstonh I think this is why its difficult to decide on a route forward as its not easy to establish clear comparisons and with so many variables. Im ok with the trade off that having more generic passive funds in terms of performance  but is there a good resource to compare overall performance after fees for the main SIPP platforms? 

I was looking at vanguard because of the platform as much as anything but have also looked at ii, pension bee and aj bell, I was leaning towards vanguard because it was often reviewed more favorably and had a managed option to consider. 

The more i read the more confused ive become    I lknow i just need to get something opened though 

dunstonh

@dunstonh I think this is why its difficult to decide on a route forward as its not easy to establish clear comparisons and with so many variables. Im ok with the trade off that having more generic passive funds in terms of performance  but is there a good resource to compare overall performance after fees for the main SIPP platforms? 

SIPPS are whole of market.   (apart from pensions marketing themselves as SIPPs when they are not).  That means they offer the same 30,000 odd range of investments.   So, its not the SIPP that matters.    If the is the investments.

I was looking at vanguard because of the platform as much as anything but have also looked at ii, pension bee and aj bell, I was leaning towards vanguard because it was often reviewed more favorably and had a managed option to consider. 

Vanguard is a restricted platform that offers only its own funds.  Not whole of market.   Vanguard is also a fund house.  You can buy Vanguard funds on whole of market platforms.   However, you cannot buy whole of market funds on Vanguards platform.  

Vanguard came to the UK and disturbed the market.  They are responsible for charges reductions. And for period, they were largely unopposed and the go to option.    However, in that time, they generated a cult of Vanguard where some people cannot see pass the brand even when alternative options exist.    Youtube and websites are dominated by fanboys of Vanguard.

And again, I like and use Vanguard funds but not their multi-asset fund. I prefer alternatives.    But then investing is largely  opinion.

You are at risk of inaction through dithering.  So, maybe the best option is to open a whole of market platform rather than a restricted offering.  That way you can adjust things later when things change (and they will).  A restricted platform limits your choices.    And if you do pick VLS on that whole of market platform then that will be perfectly fine.    It then gives you time to learn about alternatives and understand things more and if you feel an alternative is better, then you can do that within the whole of market platform easily.

GeoffTF

dunstonh said:

And again, I like and use Vanguard funds but not their multi-asset fund. I prefer alternatives.    But then investing is largely  opinion.

I would add that opinions are largely worthless here. Nobody knows what will happen. Provided that the costs are materially the same, any suitable multi-asset fund from one of the major providers will do. Nobody knows which one will do best. What matters is picking a suitable fund. Picking the best fund is impossible, except by chance.

martin7575

@dunstonh thank you this is very helpful. I have actually become much more interested through all the reading and conversation here but this is a constructive way to draw a line under my very accurately observed dithering. thanks again

martin7575

@GeoffTF thanks. I realise its all opinion but given my total lack of knowledge has been very helpful to discuss the options here. 

Albermarle

 but is there a good resource to compare overall performance after fees for the main SIPP platforms? 

As I am sure as already been mentioned more than once in this thread already.

Do not confuse the SIPP platform/provider, with the investments held within it. ( even if the funds and the platform have the same name.

LHW99

You mentioned AJ Bell. They are fine, not necessarily the cheapest DIY platform, nor the most expensive.

Vanguard fund are fine, again not the cheapest / highest performing, but then not the lowest either.

If you make a start, and get investing, it is always possible to move providers and / or funds in due course when you have learned a bit more.

martin7575

@LHW99 any experience with ii?

LHW99

I have an account with AJBell @martin7575 and had no problems in terms of the operation of the account (although its not a SIPP). I have also had an S&S ISA with them in the past, again no issues.

I have used HL and II for SIPPs & ISAs (and Jarvis many years ago), but have no experience with Vanguard platform (although have used a couple of their funds).

You would be fine with any of the major DIY platforms mentioned by people here.