Help on moving SIPP away from Scottish Widows to a new provider of my choice

Marner_Orner

Hi everyone, newbie here! I need a bit of your expert advice on switching SIPP providers.

I have a SIPP with Scottish Widows, currently around £60k. It was built up over 18 years via a company scheme, but payments stopped when I was made redundant last November.

I'm looking to move the SIPP to a new provider. The main reason is that I'm interested in partially investing in something Scottish Widows doesn't offer (specifically the Royal Mint Gold for Pensions scheme).

I contacted a few potential new providers who do offer this type of investment. To my surprise, almost all of them said I must go through an FCA financial adviser to transfer my SIPP to them.

This seems really strange and potentially expensive! I've seen estimates that advisers can charge 1-3% for transfers, which could be £600-£1000+ just to move my own money.

One provider did mention an alternative: having a free guidance session with MoneyHelper and sending them proof of the meeting. But the others seemed firm on needing the paid FCA adviser route.

So, my questions are:

    Why is an FCA financial adviser typically required for a SIPP transfer like this?

    Is it always required by providers, or are there ways around this?

    Is the free MoneyHelper guidance a valid alternative that all providers should accept?

    

Any advice or insight would be much appreciated. Thanks in advance!

DRS1

I have no idea why you need advice - it is usually because of a feature of your existing SIPP = like having a guarantee.

Perhaps in this case it is because you want to invest in something which is not mainstream?

Why do you want to invest in gold?  It has just come off some pretty big highs.  And it generates absolutely NO income.

And given that you do want to invest in gold why do it through a relatively expensive outfit like the Royal Mint?  0.5% per annum holding fee for Digigold 1% per annum  for bullion on top of buying and selling fees.   Why is that better than an ETF or ETC focussing on gold?  PHAU for example?

Marner_Orner

Hey DRS1, cheers for the quick reply.

About investing in gold: I am only thinking of partially investing in gold, not the whole pot. This is a personal choice. The gold I invest in will not be there to generate income but to be there in case something really bad comes down the pike. This may never happen of course but it is something I feel the need for. Also, moving my SIPP to a provider that allows me to invest in gold expands my options in a way that Scottish Widows can't cater for.

About ETF, ETC and PHAU, I have never heard of these. Will be researching these as we speak. Thank you for the heads up!

dunstonh

I have a SIPP with Scottish Widows, currently around £60k. It was built up over 18 years via a company scheme, but payments stopped when I was made redundant last November.

I'm looking to move the SIPP to a new provider. The main reason is that I'm interested in partially investing in something Scottish Widows doesn't offer (specifically the Royal Mint Gold for Pensions scheme).

That doesn't sound like an SW SIPP.    Its more likely to be a group personal pension, workplace pension or an occupational pension.   You can tell from the policy number if its an SW SIPP as it starts EM......

<br>I'm looking to move the SIPP to a new provider. The main reason is that I'm interested in partially investing in something Scottish Widows doesn't offer (specifically the Royal Mint Gold for Pensions scheme).

To access that, you will need a full SIPP or SSAS. Mainstream providers won't offer it on their platform SIPPs as it is an unregulated investment. Platform SIPPs are effectively SIPP-lite.

I contacted a few potential new providers who do offer this type of investment. To my surprise, almost all of them said I must go through an FCA financial adviser to transfer my SIPP to them.

That doesn't surprise me.  Platforms do not like illiquid assets.   This is why there are so few offering it.   The list that do are your usual suspects, and most of them only do business via intermediaries.

<br>This seems really strange and potentially expensive! I've seen estimates that advisers can charge 1-3% for transfers, which could be £600-£1000+ just to move my own money.

Its not strange.  You are attempting to go away from the mainstream into an unregulated investment.   They don't want the liability for doing something that they perceive is unlikely to be suitable for you to do.

So, my questions are:<br><br>&nbsp;&nbsp;&nbsp; Why is an FCA financial adviser typically required for a SIPP transfer like this?<br><br>&nbsp;&nbsp;&nbsp; Is it always required by providers, or are there ways around this?<br><br><span>&nbsp;&nbsp;&nbsp; Is the free MoneyHelper guidance a valid alternative that all providers should accept?</span>

Q1 - answered above
Q2 - Most providers won't consider it at all (i.e. no stakeholder pension, personal pension or platform SIPPs).   Only the full SIPP providers
Q3 - moneyhelper is no good to you whatsoever.   That suggestion was probably made by someone that didn't understand that you want to go off mainstream into niche areas.

DRS1

People who know more about investing than I do will probably tell you there is a place for gold in your portfolio but that it should be a small percentage of the total (no more than 5% or 10%?).

On the ETF/ETCs, one thing to watch out for is do they hold the gold or are they synthetic (don't ask me what that is).  I think the theory is that with the physical gold ones you might be able to get some actual gold.  Hopefully you'll never have to ask.  At least with Royal Mint they say your gold is in their vault.  But if you hold via a SIPP I don't think you can ever actually see it even with them.

The advantage with ETF/ETCs is they are a lot easier to sell/buy and the spread is likely to be a lot less than it would be with actual physical gold bullion (not sure about Digigold).

Assuming you open a new SIPP with a mainstream SIPP provider you may find that you don't need advice for the transfer of the SW pension.  Just make sure the provider will let you buy what you want in their SIPP.  For example on HL (not a recommendation just a page I can easily access) you will see a tick by SIPP to show you can buy this particular ETC in their SIPP
iShares Physical Metals plc Share Price (SGLN) Physical Gold ETC | SGLN

Marner_Orner

Hey dunstonh and DRS1, thanks so much for the expert responses. Light is actually dawning thanks to your clarifications. Especially when dunstonh said "Its not strange.  You are attempting to go away from the mainstream into an unregulated investment. They don't want the liability for doing something that they perceive is unlikely to be suitable for you to do."

This makes much more sense to me now. I am a bit of a newbie not just on this forum but generally in the world of finance too and I was a bit (probably naively) indignant at the idea of having to get the permission of a third party to move my own money and to have to pay them for the priviledge too. But now I do see the financial logic behind this, things are falling into place in my head.

It did just occur to to me: if I do want to partially invest in gold (maybe 10% of my pension max) I could take it out as tax-free lump sum and actually purchase the physical gold myself without having to run through financial advisor hoops. Would that make sense?

Cheers again for the expert responses.

Albermarle

As explained in the post before yours, you can buy regulated investments that track the price of gold ( a link was supplied).
As they are regulated, they are available in a number of different SIPPs that you could transfer to without financial advice.
Process is as follows;
1) Find a SIPP that offers them . Could be HL, Fidelity, AJ Bell, Interactive Investor etc 
2) Register online for a new SIPP.
3) Request transfer from SW 
4) Money will arrive in cash
5) Buy Gold ETF ( like the one in the link) with 10% of the cash
6) Invest the other 90% in investments of your choice.

Marner_Orner

Thank you all for the expert advice. Got some thinking to do!

Cheers