Financial Advisor Planning to Move to New SIPP Platform?

RSTime

My wife had her annual SIPP review meeting with her financial advisor. The company are considering moving her SIPP from AJ Bell to Soderberg. They claim that Soderberg has outperformed AJ Bell, but he also disclosed that Soderberg have made a small investment in their company. We have not heard of Soderberg, is moving platforms common practice with SIPPS? Apparently marginal difference in costs.

Dazed_and_C0nfused

RSTime said:

My wife had her annual SIPP review meeting with her financial advisor. The company are considering moving her SIPP from AJ Bell to Soderberg. They claim that Soderberg has outperformed AJ Bell, but he also disclosed that Soderberg have made a small investment in their company. We have not heard of Soderberg, is moving platforms common practice with SIPPS? Apparently marginal difference in costs.

Isn't it the pension funds within the pension wrapper that perform, not the provider (although fees are an important consideration).

Why is she even using a financial advisor?  DIY or an IFA is the normal choice.

dunstonh

RSTime said:

My wife had her annual SIPP review meeting with her financial advisor. The company are considering moving her SIPP from AJ Bell to v. They claim that Soderberg has outperformed AJ Bell, but he also disclosed that Soderberg have made a small investment in their company. We have not heard of Soderberg, is moving platforms common practice with SIPPS? Apparently marginal difference in costs.

This is confusing.

The SIPP provider is not responsible for any performance.  So, any reference to performance at provider level is wrong.   

Personally, I had not heard of Soderberg before now.  It doesn't appear in my due diligence lists.  Although that could be because our research settings filter it out.  Or it could be, that after looking at their platform charges which are nothing special (0-100k - 0.25%, 100-250k 0.20%, 250-500k 0.15%...) they are appearing further down the list and I haven't noticed them as I don't look that low down.

 is moving platforms common practice with SIPPS? Apparently marginal difference in costs.

  IFAs moving platform around is very common.     The best platforms today were not the best 10 years ago or 20 years ago.   So, every 5-10 years, you do find you need to move platforms to continue to get the best software and the lower costs.  Most IFAs will do this free of charge when you are an ongoing servicing client.

So, moving between two whole of market platforms has nothing to do with performance.  It will be about charges, software and service.  However, I do notice that Soderberg also have in-house portfolios.    So, it could be that your adviser is not an IFA or about to no longer be an IFA and is restricted by tying themselves to that platform and portfolios.

Albermarle

They claim that Soderberg has outperformed AJ Bell,

If a financial advisor told me that one investment platform outperformed another, I would be immediately suspicious, because as explained above it is the investments you hold on these platforms that perform, not the platforms themselves.

If they were maybe saying that Sodeburg had some in house investment portfolios that performed better than AJ Bell ones, it would make more sense. However I would be wanting a lot more detail, and I would still be suspicious that there was some other motive, especially as there seems to be some link between the platform and the advisor.
Especially as @dunstonh, who is an experienced IFA, had never heard of them. 

RSTime

Apparently Soderberg are a large Swedish provider (top 2 in that market) and a reputable firm.

We are using a financial advisor as we are not experienced investors. I guess my concern here is the conflict of interests as has been alluded to. 

What sort of detail should we be asking for, details of the portfolio, ongoing costs and historic performance (compared to AJ Bell)? Should we also ask for details about Soderberg‘s holding in the company (what are they obliged to disclose)?

Albermarle

You can ask those things but as already said you can not compare platforms regarding investment performance.

In fact it is even difficult to compare investment portfolios as you are often comparing apples and pears.

dunstonh

Apparently Soderberg are a large Swedish provider (top 2 in that market) and a reputable firm.

Checked for platform research and MPS research and no date in Mabel. no data in Lang Cat.  No data in Fintegrate.  No data in FE Platform research.  No data in selectapension.  No data on Morningstar.      Some of those are the biggest IFA research tools available.  

We are using a financial advisor as we are not experienced investors. I guess my concern here is the conflict of interests as has been alluded to. 

The question was why are you using an FA and not an IFA or DIY.  FAs tie themselves to a company or a panel of companies.  They represent their company.   IFAs represent you and select from the whole of market.

What sort of detail should we be asking for, details of the portfolio, ongoing costs and historic performance (compared to AJ Bell)? 

Are you in the pre-built AJ Portfolios?   Or are you referring to AJ Bell as the provider (platform)?     AJ Bell as a the platform is whole of market with over 30,000 investments available.   

 Should we also ask for details about Soderberg‘s holding in the company (what are they obliged to disclose)?

If its an FA representing the company then it doesn't matter.   A company rep is a company rep.   It would be like going into an Apple store and asking them why they don't sell android phones.

RSTime

Would the advise be to find an IFA?

My understanding is that my wife has a pre-built AJ Portfolio which is managed. I checked and the name of the portfolio is badged with the name of the finance company my wife is using, I assume this is standard practice and that there are AJ Bell portfolios which finance companies 'adopt' for their clients and badge accordingly.

kempiejon

RSTime said:

Would the advise be to find an IFA?

My understanding is that my wife has a pre-built AJ Portfolio which is managed. I checked and the name of the portfolio is badged with the name of the finance company my wife is using, I assume this is standard practice and that there are AJ Bell portfolios which finance companies 'adopt' for their clients and badge accordingly.

If you can find the relevant AJ Bell product your wife could DIY. You don't need FA to open an AJ Bell account.
Now might be a time to see how the portoflio has compared with wife's needs and attitudes. If it has been doing the business what would the motivaton be to change to Soderberg?

RSTime

The only motivation would be if it performs better, as suggested by the financial advisor. 

Is there a way of finding the actual name of the portfolio, I suspect the system won't let you see it? Alternatively, can you actually view the range of portfolios that AJ Bell offer, I could compare to what is in my wife's portfolio?

dunstonh

Would the advise be to find an IFA?

The choice should be between DIY or IFA.  Never an FA.

My understanding is that my wife has a pre-built AJ Portfolio which is managed. I checked and the name of the portfolio is badged with the name of the finance company my wife is using, I assume this is standard practice and that there are AJ Bell portfolios which finance companies 'adopt' for their clients and badge accordingly.

No, that is not standard.  It's an option, but it's typically used by DIY investors with smaller amounts, not wanting or needing advice.       Adviser firms can often use the in-house portfolios of the platform, but it's unusual for them to do so as they are rarely the best option available.   

Here is the 2 year performance of some of the popular DIY options, popular low cost IFA options and AJ Bells offerings
  

The only motivation would be if it performs better, as suggested by the financial advisor. 

You have to be careful with performance.    The list I gave above is the same timescale, same risk and apart from 3 of the AJ Bell portfolios, they were all with underlying passive funds.