SIPP Management?

RSTime

A friend took out a SIPP using a local financial advisor a few years ago. She had a handful of company pensions and the advisor transferred into an AJ Bell SIPP. She is paying the advisor 1% a year. Should she look to manage the SIPP herself? I use Vanguard for my ISAs and their SIPP seems to be inexpensive and they also have a managed SIPP.

My questions are i) what does her financial advisor do for his commission once the SIPP is set up and ii) how easy is it to transfer a SIPP and is there any merit in staying with AJ Bell or moving to a lower cost platform such as Vanguard.

MallyGirl

Vanguard only lets you invest in Vanguard funds whereas AJ Bell is whole of market. If she is comfortable choosing and managing her own investments then she could end her contract with the IFA. If she isn't then maybe they are doing what she needs them to.

Marcon

RSTime said:

A friend took out a SIPP using a local financial advisor a few years ago. She had a handful of company pensions and the advisor transferred into an AJ Bell SIPP. She is paying the advisor 1% a year. Should she look to manage the SIPP herself? I use Vanguard for my ISAs and their SIPP seems to be inexpensive and they also have a managed SIPP.

My questions are i) what does her financial advisor do for his commission once the SIPP is set up and ii) how easy is it to transfer a SIPP and is there any merit in staying with AJ Bell or moving to a lower cost platform such as Vanguard.

Wouldn't it be better for her to post the question so that she can respond to any request for further information?

For example, does she have the skill and confidence to manage her own investments?

Albermarle

How big is the pot ?
How much does she understand about pensions, investments, personal finance ?

RSTime

Pot is £300k, she is not that confident in managing her own investments but I am happy to help. Vanguard offer an inexpensive managed fund which I thought would be ideal for her. 

HappyHarry

RSTime said:

Pot is £300k, she is not that confident in managing her own investments but I am happy to help. Vanguard offer an inexpensive managed fund which I thought would be ideal for her. 

Your suggestion is that as she is not confident in her own investment management skills  that she takes free/cheap unregulated advice instead of paid-for regulated advice?

To be honest, it doesn’t sound ideal for her.

Marcon

RSTime said:

Pot is £300k, she is not that confident in managing her own investments but I am happy to help. Vanguard offer an inexpensive managed fund which I thought would be ideal for her. 

How well qualified are you to advise others? Presumably you aren't a regulated individual, given that in your own post in October 2023  https://forums.moneysavingexpert.com/discussion/6478228/setting-up-a-sipp-when-drawing-a-db-pension-and-working-pt/p1 you said:


I don't really know much about SIPPs having only had DB pensions in the past, is it as simple as going to a platform such as Vanguard and setting up an account?



Do her a favour and point her towards someone who can give proper advice. If you want to gamble, do it with your own money - not hers.

Linton

If you want to lose a friend advise them on their investments.  The next crash could well be your fault.

Albermarle

 She is paying the advisor 1% a year.

Pot is £300k

1% pa is on the higher side for a fund of that size. She could try and negotiate to 0.75%.

Also the total cost is important. If as well as the 1% advisor fee, the investments ( + AJ Bell's charge) are relatively expensive, then that is more of a problem.

The total cost should be ideally < 1.5%. Of course you can DIY with Vanguard for say 0.35%, but without any advice. They do now offer a managed SIPP with an extra cost of 0.3% but it is a pretty basic service.

Ivkoto

If she knows her risk tolerance, AJ Bell offers their ready made funds at acceptable cost. Look at their website and in the menu select ➡️ funds ➡️ AJ Bell funds

sevenhills

RSTime said:

A friend took out a SIPP using a local financial advisor a few years ago. She had a handful of company pensions and the advisor transferred into an AJ Bell SIPP. She is paying the advisor 1% a year. Should she look to manage the SIPP herself? I use Vanguard for my ISAs and their SIPP seems to be inexpensive and they also have a managed SIPP.

My questions are i) what does her financial advisor do for his commission once the SIPP is set up and ii) how easy is it to transfer a SIPP and is there any merit in staying with AJ Bell or moving to a lower cost platform such as Vanguard.

How has the return been on her SIPP and your SIPP, are you able to compare?