SIPP account recommendation?

330d

Thank you for all the replies. I am leaning towards Vanguard.

Although Fidelity also seems popular although it's fees are slightly higher. Is there any other advantage of Fidelity?

dunstonh

Although Fidelity also seems popular although it's fees are slightly higher. Is there any other advantage of Fidelity?

Fidelity is whole of market.  Which is important to many investors as Vanguard do not have the best funds in every area (no fund house does).  So, the ability to select from multiple fund houses can be important.

I don't like the Fidelity interface but software is a personal thing and others may feel different. 

Bostonerimus1

dunstonh said:

Although Fidelity also seems popular although it's fees are slightly higher. Is there any other advantage of Fidelity?

Fidelity is whole of market.  Which is important to many investors as Vanguard do not have the best funds in every area (no fund house does).  So, the ability to select from multiple fund houses can be important.

I don't like the Fidelity interface but software is a personal thing and others may feel different. 

Many people can be paralyzed by the choice of the whole market. Choosing from a single family of funds, be it Vanguard, HSBC, Fidelity etc will give people more than enough market access. So, OP, anyone of the big UK providers will be just fine, keep your portfolio simple so you can easily compare fees and keep costs down.. the most important choice you've made is to actually open a SIPP and benefit from the tax break and the possibility of long term investment growth.

Albermarle

ComicGeek said:

330d said:

Thanks for all the replies. Apologies if I've used the wrong terminology earlier and confused things.

It's the Vanguard lifestrategy funds im looking at choosing. Not sure on which risk factor yet but will be one of them.

https://www.vanguardinvestor.co.uk/what-we-offer/all-products

I've been doing a lot of research into the different Vanguard multi asset funds and these lifestrategy funds. The UK % seems to be very high for these lifestrategy funds, and their fund objective seems to be that "the UK will generally form one of the largest single country exposures for shares and bonds" - not sure why they would choose that, as I don't believe that the UK market is going to outperform the rest of the world, you might have a different opinion. Just something to consider when looking at their ready made portfolios.

I'm also realising that company contributions are also difficult for some of these low cost platforms. Vanguard aren't a workplace scheme so employers can't make contributions to personal pensions. As a registered director of my company I can make one-off payments via debit card (which I don't have at the moment), but can't make BACs payments from the company or regular direct debits. 

Fidelity will set up regular payments from my company without any issue, but annual fees are slightly higher and I would need to look at funds again in more detail.

What I'm realising is there is no perfect solution and always some compromise.

Traditionally U.K. pension providers had a heavy bias towards the U.K.( a lot more than 25% in many cases) and some customers still prefer this. So in setting up their life strategy funds with a U.K. bias, they probably saw it as a good commercial move to attract your typical U.K. small investors.
Also remember that these funds also contain gilts and bonds, where a U.K. bias is probably less of an issue.

Altior

The curious element to that is one wonders how many clients contributing to VG LS funds are aware they have a domestic bias. Not very many retail investors I'd have thought. And those that are interested in looking under the hood are more likely to be turned off by it.  

dunstonh

Altior said:

The curious element to that is one wonders how many clients contributing to VG LS funds are aware they have a domestic bias. Not very many retail investors I'd have thought. And those that are interested in looking under the hood are more likely to be turned off by it.  

And, as I have mentioned elsehwere, IFAs have access to two versions of VLS.  One with home bias and one without home bias.  

Bostonerimus1

Altior said:

The curious element to that is one wonders how many clients contributing to VG LS funds are aware they have a domestic bias. Not very many retail investors I'd have thought. And those that are interested in looking under the hood are more likely to be turned off by it.  

Historically Vanguard US has also had a domestic bias, but given that is the USA it's a little different from overweighting the UK. To this day I own a small amount of Vanguard's Wellesley multi-asset income fund that owns US dividend stocks and bonds and they recently introduced a global version of it, but its fee is 0.44% so it's not for me. I think the UK bias of VLS is probably more a marketing hang over than anything else and probably out of date by now.

barnstar2077

330d said:

Ok looking to open a SIPP account and have done some research on which one to open. I'm leaning towards Vanguard as they have the lowest fees compared to others and they have good choice of the ready made portfolios to choose from.

Anything else I need to be aware of? Or any other recommendations?

Thank you 

330d said:

Ok looking to open a SIPP account and have done some research on which one to open. I'm leaning towards Vanguard as they have the lowest fees compared to others and they have good choice of the ready made portfolios to choose from.

Anything else I need to be aware of? Or any other recommendations?

Thank you 

If you would prefer something without as much UK bias, and you have ten or more years to go, you may want to consider Vanguard's FTSE Global All Cap index fund.  It resembles the global market more accurately, and it is a one stop shop.  No need to hold anything else unless you really want to. It does go up and down with the world economy, but has managed a pretty good return so far.