Going solo

System

This discussion was created from comments split from: Pension Options and IFA advice.

housedesign1

Jumping on the bandwagon of this post if I may. Not too sure why I am posting, other than in the hope that sharing my feelings of disloyalty in wishing to now extract from my FA (connected to a wealth platform) after almost 30 years, will allow me to move forward and DIY having over the past year taken an interest in and accumulated learning on tax and personal finance/investment.

All this time my pot has suffered an annual charge of approx. 2% (1% FA and 1% platform/funds etc). For this I have received various good advice which gave me confidence that my affairs were being managed over the years but also I now know, advice geared towards limited funds/platform as not an IFA.  Calculated a net return of 4% pa over the past decade in my estimation.

Opened a Hargreaves Lansdown SIPP and ISA and want to transfer over with one or two broad ETFs.  Have a game plan, but feels after all this time I am taking a big leap on my own, but almost more importantly, being disloyal to one person albeit that person has lined their pocket quite nicely over 30 years.

I am not quite sure what I am looking for by posting this. Encouragement to take the leap perhaps.

FIREDreamer

housedesign1 said:

Jumping on the bandwagon of this post if I may. Not too sure why I am posting, other than in the hope that sharing my feelings of disloyalty in wishing to now extract from my FA (connected to a wealth platform) after almost 30 years, will allow me to move forward and DIY having over the past year taken an interest in and accumulated learning on tax and personal finance/investment.

All this time my pot has suffered an annual charge of approx. 2% (1% FA and 1% platform/funds etc). For this I have received various good advice which gave me confidence that my affairs were being managed over the years but also I now know, advice geared towards limited funds/platform as not an IFA.  Calculated a net return of 4% pa over the past decade in my estimation.

Opened a Hargreaves Lansdown SIPP and ISA and want to transfer over with one or two broad ETFs.  Have a game plan, but feels after all this time I am taking a big leap on my own, but almost more importantly, being disloyal to one person albeit that person has lined their pocket quite nicely over 30 years.

I am not quite sure what I am looking for by posting this. Encouragement to take the leap perhaps.

As long as you only use shares (including investment trusts and ETFs) then Hargreaves Lansdown are reasonable with a cap of £45 and £200 on annual platform fees for ISA and SIPP respectively.

Avoid funds because the platform fees are pretty much uncapped and much higher.

housedesign1

Thank you both for the encouragement.  Choosing a global accumulation EFT.  Note that HL will not auto-reinvest the monthly tax relief and so will pay appx £11 for the pleasure each month.  What would you do?  Suck up the fee or accumulate in cash and move into the fund x2 per year for example, to reduce £11 fee each time?

AlanP_2

housedesign1 said:

Thank you both for the encouragement.  Choosing a global accumulation EFT.  Note that HL will not auto-reinvest the monthly tax relief and so will pay appx £11 for the pleasure each month.  What would you do?  Suck up the fee or accumulate in cash and move into the fund x2 per year for example, to reduce £11 fee each time?

Your questions and answers are getting mixed in with the OPs which can cause confusion unless it is really clear as to who is answering what. I'd suggest asking the moderators to split your Q's and As out in to their own topic for ease and clarity.

Is sounds like you will be making monthly contributions. Are ETFs the best option in that situation given HL buy/sell fees? 

You could use funds and then move say 6 months worth across into your chosen ETF to reduce fees.

Not sure now much you have in your pot but a transfer to Fidelity to take advantage of their current cashback deal might be worth looking at. I'm going to do that for one of our pensions and cashback should cover fees for about 4 to 5 years ahead.

MallyGirl

I have split these posts out into a separate thread to avoid confusion 

Brie

Jumping in here - what do people mean by "avoiding funds"?  And ETF?

housedesign1

AlanP_2 said:

housedesign1 said:

Thank you both for the encouragement.  Choosing a global accumulation EFT.  Note that HL will not auto-reinvest the monthly tax relief and so will pay appx £11 for the pleasure each month.  What would you do?  Suck up the fee or accumulate in cash and move into the fund x2 per year for example, to reduce £11 fee each time?

Your questions and answers are getting mixed in with the OPs which can cause confusion unless it is really clear as to who is answering what. I'd suggest asking the moderators to split your Q's and As out in to their own topic for ease and clarity.

Is sounds like you will be making monthly contributions. Are ETFs the best option in that situation given HL buy/sell fees? 

You could use funds and then move say 6 months worth across into your chosen ETF to reduce fees.

Not sure now much you have in your pot but a transfer to Fidelity to take advantage of their current cashback deal might be worth looking at. I'm going to do that for one of our pensions and cashback should cover fees for about 4 to 5 years ahead.

Thank you for the Fidelity suggestion.  I will definitely look into opening a SIPP here from which I can transfer over from the FA managed fund which has relatively sizeable pot!  As for now contributions to the latter have stopped and regular contributions re-directed to LH.  I've gone for one set and forget EFT which attracts no trade fees I believe if with a regular monthly contribution.

bjorn_toby_wilde

Brie said:

Jumping in here - what do people mean by "avoiding funds"?  And ETF?

ETF = exchange traded funds

https://monevator.com/etfs-vs-index-funds-differences/

I think that the advice to avoid funds above is specifically for HL because of their fees on index funds, rather than to avoid index funds per se. I’m sure someone will be along to confirm or rebut that.

PaulJacksonUK

Anything listed as a fund on HL will have uncapped fees. The fees on shares and ETFs as capped as described previously.

Albermarle

bjorn_toby_wilde said:

Brie said:

Jumping in here - what do people mean by "avoiding funds"?  And ETF?

ETF = exchange traded funds

https://monevator.com/etfs-vs-index-funds-differences/

I think that the advice to avoid funds above is specifically for HL because of their fees on index funds, rather than to avoid index funds per se. I’m sure someone will be along to confirm or rebut that.

The advice is not just for HL customers, similar caps are also in place on the Fidelity and AL Bell platforms.

Also it is not just index funds, it refers to all OEIC funds.

In addition the caps are for 'exchange traded products' so also includes individual company shares and Investment Trusts, as well as ETF's.